Cash exchange rorts to end
SOPHIE ELSWORTH
GOUGING of Australians converting foreign currency finally looks set to end.
For too long jetsetters have been fleeced for exchanging their cold, hard, cash and, sadly, many just copped it on the chin.
Competition watchdog the Australian Competition and Consumer Commission’s report into foreign currency conversion services was released last week and, to be frank, none of it surprised me. It found travellers find it hard to compare prices and the big four banks – ANZ, Westpac, Commonwealth Bank and National Australia Bank – have some of the worst exchange rate deals on offer.
And, for the disorganised traveller, if you swap money at the airport you’re going to get hit by appalling exchange rates.
The report found, when exchanging $US200, consumers could have saved themselves $A40 by buying from the cheapest supplier at a non-airport location.
Consumer inertia results in people not bothering to switch to cheaper foreign currency suppliers.
I’ve been writing about currency exchange for years but it never ceases to amaze me how many jetsetters head overseas without giving their money any serious thought.
And they are the ones who pay for it big time.
I was lucky enough to head overseas recently and one thing I refused to do was hand over my cash to greedy banks wanting to rip me off on foreign exchange fees. I had in tow with me two bank cards: ING and Up bank cards that don’t charge pesky international transaction fees. ING gave me another bonus: I was refunded any ATM charges that I got stung with overseas, whereas with Up I got hit with ATM charges, often around $5 a pop. More of these fee-free deals
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are coming onto the market but you definitely have to handpick them.
International money transfers (IMT), which are when you send cash from Australia to somewhere overseas, are also atrocious. So what’s the result? The ACCC report says a whole raft of changes needs to be introduced to clean up the foreign exchange industry.
This includes informing customers from the get-go of IMT fees and what the total price of the transfer will be.
Foreign exchange mobs need to provide online calculators to help consumers tally up exactly how much they are paying. They also have to provide price information in store so customers understand what charges they are up for.
International transaction fees must also be disclosed.
The consumer watchdog will keep a close eye on the industry to ensure it cleans up its act in the next 12 months, and then the ACCC will report back to the government.
Going overseas is expensive enough, so if foreign exchange businesses are forced to improve it can only be a good thing for jetsetters.
They’ve been gouged for too long and, for foreign exchanges, their time is up.
PERSONAL FINANCE WRITER
@sophieelsworth