The £60million currency TRAP
If you’re abroad on holiday and a shop or restaurant offers to convert your bill into sterling, then say NO or it will cost you dear
BRITISH tourists could save themselves more than £60 million in rip-off fees next month – by wising up to the biggest currency trap used by overseas firms. A week ago, The Mail on Sunday highlighted how consumers routinely lose out on poor exchange rates before they have even left home. But today, we expose the trick that dupes millions of holidaymakers every year while abroad. It is known as ‘ dynamic currency conversion’.
Foreign shops, restaurants and cashpoints offer to convert a bill or cash withdrawal into a customer’s home currency – so t he sum charged can be seen in pounds straightaway.
Those who accept this offer ditch the rate set by their bank card provider and accept whatever rate the business wants to charge. In some cases, the mark-up on conversion costs is as high as 12 per cent.
It is a big profit-winner for businesses in popular holiday destinations such as Spain. Last year, it cheated British tourists out of £1.3 million a day, according to currency provider FairFX.
But our research shows that with tourism at its peak during the school holidays, the cost of the currency trap in the coming weeks will be running at far higher than the daily average.
James Hickman, chief commercial officer at FairFX, says: ‘When people are asked if they want to pay in sterling, their first reaction is to say yes. Many consumers are unaware that they are being charged handsomely for the privilege.
‘It is an expensive mistake, especially if repeated throughout the course of a summer holiday. The simple solution is to always pay in the local currency.’
The first place to look out for such traps is at cashpoint machines.