Date issued: 21 Nov 2005

DYNAMIC CURRENCY CONVERSION – IT’S ALL FOREIGN TO ME!
Nationwide warns holiday makers to avoid being stung when using cards abroad

Nationwide Building Society has today issued a warning to those people who use their cards abroad. Travellers are increasingly in danger of being caught out by a common phenomenon called Dynamic Currency Conversion (DCC). This currency conversion ‘service’ is prevalent in Spain, Italy, Ireland, Germany, France and USA and is often operated in restaurants, shops, car rental companies and hotels. Where retailers operate this ‘service’ it can result in consumers paying extra on their purchases. In July 2005 alone UK card holders were charged almost £5m by retailers overseas to convert their transactions into sterling.* In July too, a 12 month pilot was launched to allow ATM providers to operate DCC, and this is likely to result in increased charges for UK visitors abroad.

Stuart Bernau, Nationwide’s executive director, said: “Nationwide’s customers have benefited from the free use of their cards abroad for some years now. We want to raise the awareness of all users of cards abroad about the potential to lose out from this so called ‘service’.

“We would advise people to check any slip or bill before signing, or entering their PIN. If a retailer overseas has converted the bill into pounds sterling with their own additional conversion fee attached, people should ask to be billed in the local currency. Customers of most organisations would benefit from doing this and for Nationwide’s customers this will protect free card use abroad.”

For further information:

Sarah King, 01793 657225, sarah.king@nationwide.co.uk

Notes to editors:

* Nationwide estimate

Nationwide is the only high street financial provider not to charge a foreign currency loading fee for customers using its cards abroad. This ‘hidden’ fee is typically charged at 2.75% on cash withdrawals and purchases anywhere in the world. In addition, Nationwide’s current account (FlexAccount) customers withdrawing money from foreign ATMs are not charged a cash advance fee.

APACS Plastic Card Review 2005 states that £20,006 million was spent on payment cards in 2004. If all those purchases then had foreign currency loading fees added, typically at 2.75%, then the cost to consumers would be nearly £500 million.

For more information about Dynamic Currency Conversion please see our factsheet.