UK banks scrap currency fees

UK banks scrap currency fees

Following an Office of Fair Trading probe, British banks have agreed to ditch some of the fees they charge people for buying foreign currency.

Following a super-complaint from Consumer Focus in September, the OFT has been investigating the charges holidaymakers pay. The watchdog says that in 2010 travel money providers made £1.1 billion from the £32 billion Brits spent on holiday cash.

It has now secured agreement from Lloyds, Barclays, RBS, Santander and the Co-operative Bank to scrap the fees - typically 1.5% to two per cent - they charge for buying foreign currency in the UK with debit cards.

Lloyds, HSBC, Co-operative Bank, Capital One, RBS and American Express have also agreed to display the charges incurred by customers for using cards abroad far more clearly on their monthly and annual statements.

Meanwhile, all banks and card companies have agreed to revamp their Webs sites so customers will be able to see, at a glance, all the fees that apply. The UK Cards Association and the BBA say they will develop industry guidelines to ensure that consistent information is provided to customers by the end of 2012.

John Fingleton, CEO, OFT, says: "Companies should be earning profits by competing to provide the best value products and services, not through charges that are hard for customers to identify or interpret. We are very pleased that the travel money industry has agreed, following a OFT short investigation, to make these significant voluntary changes."

Welcoming the developments, Mike O'Connor, CEO, Consumer Focus, adds: "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."

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