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FairFX.com calls on travel money industry to clean up its act

17th August 2009 Print
Research out today from FairFX.com, the leading currency provider, exposes some of the practices which too often leave travellers facing unexpected costs.

"Free" is a term used frequently by travel money providers, but is widely misunderstood. Only 4% of respondents completely understand that even when the term ‘free' is used there could still be a cost to them.

Consumers are bombarded with phrases like "free of charge", "completely free" and "commission free". However, amongst those same providers are a raft of confusing charges or costs which even the savviest traveller would be hard pushed to be able to identify.

The worst industry practices identified include:

Publicising free services whilst increasing hidden costs
Non usage fees
Cross-border fees
0% commission / commission free
Differential pricing online vs high street branches
Poor exchange rates at many airports
Misleading guarantees

Research shows people are willing to pay for something, but only if providers are upfront about the costs (51%). The industry should take note as not only would two-thirds (63%) feel deceived if they subsequently discovered a cost, but 62% said they would never use that company again.

Stephen Heath, Chief Executive of FairFX.com, said: "Opaque or hidden charges in the travel money sector are frequently misleading and also remove a consumer's right to make an informed choice.

"Consumers should watch out for the worst misleading practices which could cost them dearly. Practices like advertising 0% commission but offering a poor exchange rate instead, quoting a competitive rate online, but not matching it in store; charging a hidden service fee are all stealth charges by any other name."

Over half of people (56%) don't check all the small print before buying so it is easy to see how so many people could get confused. In fact some of the potential costs are not found in the terms and conditions but are built into the exchange rate margins.

Stephen continued: "The industry cannot keep giving with one hand, while taking with the other. We are calling on all providers to be clear and transparent about the fees, so that the traveller can decide upfront whether they are happy to end up with less of their currency in their wallet.

"We believe very strongly that travellers need to be aware of these hidden costs which ultimately mean they could be stung for as much as €138 in Euroland, $190 in the US and £108 in the rest of the world extra per £1,000."