Big four bank gouge travellers with more expensive fees

Jetsetters are getting slugged with hefty foreign currency conversion fees and are often left worse off if they exchange money with the big four banks. SEE HOW THE FEES COMPARE.

Jetsetters are getting dudded by the big four banks by sticking with them when using foreign currency.

A new 103-page report commissioned by Treasurer Josh Frydenberg and compiled by the Australian Competition and Consumer Commission into foreign currency conversion has been released on Monday and revealed currency rates are difficult for consumers to compare.

It also found everyday banking cards — debit and credit cards — are generally cheaper than using foreign cash, travel cards and international money transfers.

And it showed loyalty to the big four banks including the Commonwealth Bank, Westpac, ANZ and National Australia Bank hits consumers hip pockets hard.

Australians purchase more than $40 billion in foreign currency from conversion services annually and of those about $21 billion is in international money transfers (IMT) sent from Australia.

An IMT is when money is transferred from a sender in Australia to an overseas recipient.

A travel card is money that loaded and stored on a payment card and can be used overseas.

And it found at one major bank purchasing US$200 would cost a traveller A$303, compared to on a travel card at A$293 and a payment card at A$281.

Customers are getting dudded when converting their money into foreign currency.

The report found:

• If customers using IMT with the big four banks switched to the cheapest deal in 2017-18 they could have saved about $115 million in US dollars and $40 million in British Pounds.

• Also, if big four bank customers used a debit or credit card without international transaction fees instead of using travel money cards, they could have saved $13 Australian dollars on a US$200 purchase.

• A customer transferring A$10,500 to the United States could save up to A$550 by using the

cheapest provider.

Treasurer Josh Frydenberg said the findings were a worry for travellers.

“Australians should be able to travel overseas knowing they are not getting ripped off by providers charging high transaction fees,” he said.

“Given how widely foreign currency conversion services are used by consumers and businesses, reform in this area will make a real difference and put more money in the pockets of Australians.”

MORE: The cheapest ways to sort currency before going overseas

To get better exchange rate deals the ACCC has warned consumers that suppliers offer better rates online and to avoid exchanging cash at the airport because it’s more expensive.

And when they use a debit or credit card when paying overseas they should pay in the local currency not in Australian dollars.

The ACCC will now take action of implementing recommendations and report back to the government within 12 months.

@sophieelsworth

Originally published as Big four bank gouge travellers with more expensive fees