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Travel Money

Name of complainant: Consumer Focus

Date of complaint: 21 September 2011

Date of publication of the OFT response to complaint: 20 December 2011

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Subject of complaint

Consumer Focus identified three features which it called on the OFT to investigate:

  • the complex and unclear charges applied when using credit or debit cards abroad are confusing and may prevent consumers from making well informed choices 
  • the charges applied by some banks and credit card providers for purchases of foreign currency within the UK are unfair and may restrict competition and consumer choice
  • the use by some UK foreign currency retailers of phrases promising '0% commission' and 'competitive exchange rates' may mislead consumers and prevent them from shopping around.

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OFT Response

The OFT has found that charges for purchasing foreign currency and using cards overseas can be confusing and often not at all clear for consumers.

The OFT has secured agreement from banks and travel money providers to significantly improve the information on options available for consumers purchasing foreign currency in the UK or using credit and debit cards abroad. The OFT has engaged closely with the industry to tackle the problems identified and welcomes a range of initiatives agreed with banks and other providers, including:

  • Agreement from five banks to scrap charges for consumers using their debit cards to purchase foreign currency in the UK (typically between 1.5 and 2 per cent of the amount being purchased)
  • A joint agreement from the UK Cards Association and the British Bankers Association, on behalf of their members, that they will give clearer, more accessible information about their charges for using cards abroad, including on websites, statements and through call centres
  • Agreements from a number of card providers to display the actual charges incurred by customers for using cards abroad far more clearly on their monthly and annual statements.  
  • Many foreign currency businesses have agreed to review their marketing to make the various costs and conditions that apply clearer, particularly those applicable to '0% commission' deals

The OFT will work with the UK Cards Association and the British Bankers' Association on delivery of some of these initiatives. The OFT will also monitor, through the course of 2012, the progress on the improvements to be made to the UK travel money market for the benefit of consumers.

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Key documents

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Related items

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Contact details

Team leader: John Reynolds (john.reynolds@oft.gsi.gov.uk, 020 7211 8763)
Project Director: Claire Hart (claire.hart@oft.gsi.gov.uk, 020 7211 8782)
Senior Responsible Officer: Sonya Branch (sonya.branch @oft.gsi.gov.uk, 020 7211 8707)

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