ATM Dynamic Currency Conversion Scam

[Andy_Bangle]

Just having a rant & giving y'all a warning as the Dynamic Currency Conversion (DCC) scam is alive and well and spreading like a fire across Europe. Most of the hotels in Netherlands were very eager to offer me the ability to pay on the currency of the card used and not in Euros.

The ATM scam at the Copenhagen airport is even more disgusting, however. When you try to withdraw cash, you are presented with a DCC screen. The ATM presents a currency conversion rate from DKK to USD and advertises it as “0% COMMISSION” that is an outright lie.

After you choose the option that you prefer being charged the DKK, another screen pops up to make sure that I don’t want to switch to being charged in USD.

Can you guess how much the rate is actually off?

What posted to my MasterCard for this transaction was $187.89. I saved close to $13 by not taking advantage of the “convenience” of having the currency conversion done by this ATM, but rather relied on MasterCard itself.

When the hotels try to rip you off on their Dynamic Currency Conversion, the rate is usually off by 3% to 4% and sometimes the information about the spread is actually printed on the receipt.

This ATM at the Copenhagen airport has so far been the most blatant example how some of these institutions are trying to rip off their customers. They advertise that there is ZERO commission but forget to note that the exchange rate used is off by close to 7%.

Just a reminder that you should ALWAYS decline the option to pay in the currency of the country where your card was issued (if traveling outside of the same currency area) and insist that you get charged in the local currency.

 

I've seen this in stores in the USA, Greece, both Oz & NZ as well Europe - it's a global thing - so be careful when it comes to paying abroad. 

Edited May 9, 2014 by Andy_Bangle

[drpellypo]

This was a new thing to me a few weeks ago in Dublin. I smelled a rat when they offered for me to pay in stirling and declined, then looked it up. Obviously paid in euros for the rest of my trip! Some friends decided to go with stirling instead and I worked out their meal was 5% more than mine. Absolutely no transparency with regards to charges on chip and pin machines. They simply said, do you want to pay in stirling?

[Cuprabob]

Stirling.- I thought that was the new Scottish.currency in place of Sterling:-)

[drpellypo]

Yeah it is. Didn't you know?

[Soulboy]

Thanks for that Andy.

I was totally unaware of it.

[Andy_Bangle]

To recap it's not only ATM's that can offer DCC it's all chip & pin machine in hotels, pubs, restaurants etc.

 

This what it looks like when you use a European card in a London ATM ...  (These aren't my pictures, they're from https://transferwise.com/blog/2012-11/choose-local-currency-at-foreign-atm/)

 

 

 

And this is using a UK card in a Spanish ATM: 

 

Edited May 12, 2014 by Andy_Bangle

[Mac]

Loving the transposing of yes & no to the buttons - you're encouraged to press yes even if you want no. That's pretty bloody terrible.

[Andy_Bangle]

I can confirm this practice if rife in Palma. Every chip and pin terminal that I used in taxi's, restaurants, shops and the hotel prompted the option of paying in GBP (I was using an English issued card on this trip) instead of euro. To confuse matters, instead of entering your PIN code they ask you sign a receipt - so at least they can't grab your PIN code when they clone the card

[Andy_Bangle]

Thought I'd update this thread on one of my pet hates as I got stung this week, lucky on a small transaction, as everywhere in Hong Kong does DCC, from PizzaExpress, ToysR’Us, to bars and hotels. You’re given (the rather small) option to tick a little box on the receipt to pay in $HK or Sterling. Easy to miss when you’re in a rush (or drunk).

It's done in a rather sneaky way too, you hand your card over, enter the PIN and confirm the price in $HK, then given your card back with the receipt and only then given a slip to select the currency and sign (see pic). I did the maths on my hotel stay and their DCC rate was 9.5% !!! Which would have worked out an extra £15 per night. For comparison the ATM DCC rate was about 5% on the same day.

Hotels like to give you option to pay ‘in your home currency’ because they use an exchange rate far worse than the one your credit card company uses. The total cost will be higher than if you paid in local currency and then paid the 3% FX fee on your card. If you have a Post Office, Lloyds Avios or Halifax Clarity card, there will be no FX fee.

You should ALWAYS reject the option to pay in £ when overseas, even if your credit card has a 3% FX fee – You will still be better off

[JonC]

You should ALWAYS reject the option to pay in £ when overseas, even if your credit card has a 3% FX fee – You will still be better off

 

I shall remember that 

[Lussac]

I was in Kowloon same time as you then (28th Feb - 3rd Mar), didn't stay in the YMCA though but at a place just a bit further along in Mody Road.  I did notice that everywhere gave the opportunity to pay in HK$, £ or € depending on which card was used and we always chose HK$.