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Cash is under threat across our planet.
Card schemes hate cash, as they can only wring profit from their debt-creating plastic products.
Visa and MasterCard have both made clear that cash is their enemy. Since 90% of all purchases on our planet are made using cash, this enemy of the card schemes must be the trusty friend of humanity.
Cash-is-Cool is working tirelessly to defend cash from predatory card schemes.
Full story available on The Telegraph website
By Paul Farrow
Banks will stop charging customers a fee to buy foreign currency with a debit card before they leave home under an agreement with the Office of Fair Trading.
Banks had been accused of "charging customers for the privilege of taking money out of their own account". The move could save consumers millions of pounds a year.
The OFT also told the banking industry to make charges for overseas transactions more easily understood by improving credit card summary box information and by revamping websites so that customers will be able to see, at a glance, all the fees that apply.
Information will highlight circumstances where multiple charges may be incurred, for instance when using cards in foreign cash machines. Banks that currently impose charges for using debit cards when purchasing currency or travellers’ cheques in Britain have agreed to withdraw these fees.
The OFT was forced into action when Consumer Focus lodged a "super-complaint" amid allegations of complex charging structures and poor information for travellers. Consumer Focus said it believed that consumers spent around £1bn a year on exchanging money, adding that it was unclear how much of these charges were warranted.
The watchdog said charges for using debit or credit cards overseas were unnecessarily complex and confusing, adding that phrases such as "0pc commission" and "competitive exchange rates" were misleading.
The fair deal campaigners pointed out that it cost banks and credit card providers an average of 9p and 37p respectively to process debit and credit card payments. However, charges for buying currency with a card are typically 1.5pc to 2pc of the amount converted, up to a ceiling of £4.50.
Mike O’Connor, the head of Consumer Focus, said: "Consumers should be able to buy foreign currency without being misled, confused or short-changed. The OFT has agreed with Consumer Focus that people are losing out due to the action of banks and others buying and selling holiday money. The fees charged are opaque and difficult for consumers to calculate.
"The OFT has addressed the major issues we raised in this market, which is good news for consumers. By giving customers clearer and more consistent information, people will find it easier to establish what they have been charged. It is particularly welcome that the OFT has worked with the big banks to stop withdrawal fees being charged when people buy currency on their card in the UK. It is only right that this unfair cost, which effectively charges customers for the privilege of taking money out of their own account, is stopped."
Melanie Johnson, who chairs the UK Cards Association, which worked with the OFT, said: “Card use abroad has more than doubled over the past decade and this has happened for a very good reason. Cards are hugely convenient and offer consumers unique protections from loss and fraud that cash and travellers’ cheques cannot match.
"There are lots of different cards to choose from so it is important that travellers shop around for a card that is best suited to the way they want to use it. We welcome the opportunity to work closely with the OFT to deliver refinements in a number of key areas that will really help customers make better choices about how they make purchases overseas.”
Consumer Focus’s super-complaint was wide-ranging, covering a number of areas outside the banking industry’s remit, including bureaus de change and charges imposed by foreign retailers and cash machine providers.
The UK Cards Association and the British Bankers' Association will also develop industry guidelines by the end of 2012. However, from next summer all customers will be able to call their bank to find out about the charges for using their card abroad.
Stephen Heath, the head of FairFX, the currency broker, said the OFT had done "a great job" getting banks to scrap debit card charges. But he added: "It is important that consumers keep a close eye on the banks' exchange rates to make sure they do not try to pass those charges back in the way of less competitive rates in future.”
Thursday, 22nd December 2011