When ‘fee-free’ is a rip-off

A week ago, after eliminating fees for non-customer users of their ATMs, the big four banks applauded themselves for acting on consumer feedback. Never mind the fact that ATM withdrawals had fallen to their lowest level for 15 years, the banks were eager to point out they were putting the public first.

However, the cost of that PR coup to the banks, about $160 million, pales into insignificance alongside the multi-billion-dollar bonanzas they are reaping from hidden foreign exchange charges that are up to 30 times higher than comparable rates in the US, Britain and Germany.

Customers transferring funds to “fee-free’’ foreign travel cards are losing heavily, as Adam Creighton reveals today, due to the inferior exchange rates provided by banks. Customers transferring money into US dollars yesterday, for instance, had 3c to 4c per dollar skimmed off by banks. People transferring funds to overseas banks are ripped off by fee gouging.

Years ago, parents whose children were heading overseas for the first time told them only to trust banks to provide honest exchange rates. That no longer applies to the big four. Check the fine print; ask questions. Caveat emptor.