Foreign currency gouging to end for Australian travellers
For too long Aussie jetsetters have been fleeced by the banks when converting currency, but that’s about to change. Here’s how to get better returns on your cash.
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Gouging of Australians converting foreign currency finally looks set to end.
For too long innocent 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 — the Commonwealth bank, ANZ, National Australia Bank and Westpac - have some of the worst exchange rate deals on offer.
And for the disorganised traveller, if you exchange money at the airport you’re going to getting robbed.
The report found when exchanging US$200, consumers could have saved themselves A$40 by purchasing from the cheapest supplier at a non-airport location.
These airport mobs often state “no commissions, no fees”, instead slamming customers with appalling exchange rates.
Consumer inertia results in consumers 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 currency 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 those 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 are coming onto the market but you definitely have to hand pick them.
International money transfers (IMT), which are when you send cash from Australia to somewhere overseas, are also atrocious.
So what’s the result?
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The ACCC report says a whole raft of changes need 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 instore so customers understand what charges they are up for and international transaction fees must also be disclosed.
The consumer watchdog will keep a close eye on the industry to ensure they clean up their act in the next 12 months and then they will report back to the government.
Going overseas is expensive enough, so if foreign exchange businesses are forced to clean up their act it can only be a good thing for jetsetters.
They’ve been gouged for too long, and for foreign exchanges their time is up.
Originally published as Foreign currency gouging to end for Australian travellers