OFT to investigate 'super-complaint' into high costs of currency and using cards overseas
The OFT this morning confirmed that it has received a 'super complaint' from Consumer Focus, a dedicated consumer body, about the high costs to the consumer of using credit and debit cards overseas and obtaining foreign currency.
The watchdog estimates that charges to customers for exchanging money alone are around £1 billion per year and is therefore calling on the OFT to carry out its own investigation to determine the extent to which such charges are warranted.
Consumer Focus has asked the OFT to focus its investigation on three particular issues, namely
- the charges applied by some banks and credit card providers for UK purchases of foreign currency
- the complex and unclear charges applied when using credit or debit cards abroad
- the use by some UK foreign currency retailers of phrases promising '0% commission' and 'competitive exchange rates'
Consumer Focus believes that these practices are potentially unfair, confusing and/or misleading, and collectively could result in a restriction of competition and consumer choice in the sector, in addition to preventing consumers from making well informed choices when it comes to buying and spending holiday money.
Under the Enterprise Act 2002, the OFT now has 90 days to consider the issues raised in the super-complaint and has confirmed that it will publish a response on or before 20 December 2011. The regulator has also indicated that it will shortly invite interested parties to provide any information which they consider may be useful to its assessment of whether or not any feature, or combination of features, of the travel money market appears to be significantly harming the interests of consumers. Should the OFT decide that action is warranted, the OFT could undertake a market study with a view to referring the matter to the Competition Commission for an in-depth review.