Hi all – would appreciate some advice, thanks…

I just returned from holiday in Australia and I’m unhappy about 3 purchases I made on my Thomas Cook Credit Card that differ from all the others.

With all the other purchases I made, the Australian dollar amount appears to have been converted into pounds on my Thomas Cook Credit Card statement using the prevailing Visa exchange rate – that’s good.

However, with the 3 transactions I’m unhappy about, either the retailers or ANZ Bank (local bank processing all 3 credit card transactions) chose to convert the Australian dollar amount to pounds themselves, not using the prevailing Visa exchange rate, but using a less beneficial exchange rate determined by themselves.

When the first transaction happened I didn’t notice until afterward that the credit card receipt showed an amount in pounds and states in small print at the bottom of the receipt: ‘I have chosen not to pay in local currency and understand my choice is final. I acknowledge the service is not provided by Visa and that it contains at most a 2.5% exchange rate commission’. I was annoyed when I saw it, because I didn’t choose to pay in pounds, I wasn’t given a choice or made aware that they were doing that.

So from then on I checked all the receipts I was signing carefully to make sure they didn’t do that again stealthily, but I couldn’t stop it.

The second time it happened I did see the amount in pounds on the receipt and the same message prior to signing the receipt. I argued with the staff in the pizza shop to charge me in Australian dollars, that I didn’t agree with being charged in pounds, but the staff were clueless and insisted that I wasn’t being charged in pounds, that the receipt showed the amount in pounds only as a guide to how much I would be charged. That everything was fine and they couldn't help me. So there was nothing I could do to change the transaction from pounds.

The third time I saw the message and the amount showing in pounds on the receipt I was in a restaurant. I disputed the transaction with 2 staff and the manager, telling them that I didn’t agree to being charged in pounds, etc., etc. The manager insisted that they couldn’t do anything to charge me differently. That the exchange rate was fixed by ANZ Bank, etc, etc - that everything was fine. So there was nothing I could do to change the transaction from pounds again.

It doesn’t seem right or fair to me. If I make a purchase valued at $10 Australian dollars I expect to be charged $10 Australian dollars. I was using a Thomas Cook Credit Card because I wanted the prevailing Visa exchange rates. I would never agree to a less preferential rate determined by another party. What aggrieves me is that they converted the transaction to pounds using a less preferential rate so that they could profit from me and they did it stealthily without telling me or giving me any choice. Even when I spotted it happening and asked them not to, I couldn’t stop it.

Now that I’m back home I decide to complain to Thomas Cook Credit Card. But I’ve contacted them twice and they’ve told me that the matter was between me and the retailer and that they can’t do anything to help me dispute the transaction. Indeed, their transaction dispute forms don’t allow anybody to dispute transactions for this reason. It’s just wrong in my view – and I have no recourse available beyond what I’ve already done.

The money involved on 3 transactions is negligible, it's not about the money for me, it’s about the principle. How many other people are loosing out like this - the profits must run to millions or more. It’s not right. We should be able to dispute it if foreign currency transactions are converted to pounds using a less beneficial exchange rate rather than the Visa exchnge rate, without us being made aware or without us being able to reject the process.

Please help or offer comments… what do you think? Thanks…

Oh it's very nasty and called Dynamic Currency Conversion. I suppose it might work well for some people if the rate is "honest" and it gets them certainty or avoids a 3% fee. Actually I would have benefitted myself last year when I spent US$2000 on an airline ticket at $2.03 to the pound and the airline concerned didn't process the voucher for several weeks. I eventually got $1.85... I "lost" £95...

Sorry got nothing useful to say, but at least you've got something to google on. I found this:

http://www.nationwide.co.uk/mediacentre/PDF/Dynamic_Currency_Conversion_Factsheet1105.pdf

I'm dreading the day I don't get a choice. I suppose if they say "no choice" you could always try crossing out the bit that says you had a choice and see if you can dispute later.

So far, I've never had this problem (I'm mainly in Asia). I suppose the only certain way is to have a cash backup.

Thank you very much, that article by Nationwide vindicates all I said.

Show me an "honest rate" if you ever find one. The rates given to me in my 3 examples were way off the Visa rates on the day.

You would have needed a crystal ball yourself to have predicted the falling interest rates together with the fact that it would take the airline several weeks to process your charge - unlucky there.

It's interesting to see that the bank acknowledging that malpractice is going on is Nationwide - who themselves don't impose an exchange rate levy on foreign currency transactions.

Although the Thomas Cook Credit Card I was using was operating without an exchange rate levy on foreign currrency transactions, but they're withdrawing that and imposing the usual levy next month or soon after - can't remember.

The only plus side for me is that it's only happened to me so far in Australia, it's been fine in several other countries.

Incidentally, when I arrived at Cairns Airport and tried to use the airport ATM with my current account debit card, the airport ATM tried to force me into accepting an unfavourable exchange rate and when I refused the rate it declined to give me any cash so I waited until I got to a regular ATM on the street. I guess that's the next big con - ATM's trying to profit from fixing an exchange rate at the time of cash withdrawal - in fact, I understand that's a widespread practice in Spain.

So my big question is, if retailer's are failing to obtain the credit cardholder's consent and the banks know about it, then why isn't something being done to protect consumers from this malpractice?

Great advice from Lawman and I got caught out a few years ago in the USA with the Dynamic Cuurency conversion scam at a few stores there. Making a fuss didn't help so I contacted Citibank whose credit card I was using and they said this is happening more and more.

We don't seem to read or hear too much about this in the papers or TV so there must be many people getting caught out.

I now use my Nationwide Flex account debit card and withdraw local currency out at ATM's wherever I travel or use my Citibank Dollar account debit card in the States, saves a fortune in charges over the year.

That ATM which you used at Cairns Airport - was it belonging to a major bank or a Foreign Exchange company there? Banks seem to be squeezing us for every bit of profit they can now they haven't got enough to pay their bonuses!!

I'm sorry, I didn't notice or don't recall who the owner of the ATM was.

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The other side of the main issue is that because the transactions are being treated as final once processed, there's currently no avenue by which the retailers who are failing to comply with the Visa rules and failing to get the cardholder's consent will ever be brought to task by Visa or the credit card companies - what they did to me, they'll continue doing to other customers.

I didn't lose much money myself and yes there are other ways to pay. I just think what's happening is so wrong.

I'll file the experience under the category of 'don't sweat the small stuff' and give it no more attention. If we stress over all the injustice in the world, we'd be overwhelmed, there's a lot worse happening, unfortunately.

Difficult in a hotel or restaurant where you've already consumed the service at the point of paying. But in other types of shops if people started dumping the goods on the counter and walking away from the sale it could get the message through. They might start thinking about the lost gross margin as a whole, rather than the extra % they make on DCC.

In fact, if you've already consumed the service in the belief you could pay by visa/mastercard (ie sign on the window) and you were feeling brave, you could just refuse to pay at all - leaving your details and making it clear you'll pay as soon as they can get the transaction processed properly. Not sure what other jurisdictions would have to say about this, but I think in the UK you'd have a good defence against theft (making off) if it turned nasty.

Hopefully this is just a phase. Once consumers become aware, internet sites start listing hotels that insist on DCC, restaurants start "getting reputations" and someone manages to start charging back stuff where they can establish they didn't really have a choice, the whole thing will fall apart. Wishful thinking perhaps in a world where so many consumers are lazy.