Date issued: 6 Feb 2006

NATIONWIDE LAUNCHES CUSTOMER GUIDE CARD
New DCC initiative to raise awareness among card users abroad

On 1 February, Nationwide Building Society will be launching a guide card to its members with helpful hints to raise awareness about Dynamic Currency Conversion (DCC). Travellers are increasingly in danger of being caught out by this so called 'service'. Nationwide estimates that in July 2005 alone UK holidaymakers were charged almost £5 million by retailers using DCC overseas.*

As part of an awareness campaign the guide card will be made available in branches and included with travel insurance documents. The card recommends that when abroad Nationwide's cardholders always opt to pay for purchases in the local currency of the country they are visiting. This ensures that they get the best exchange rate and no commission charges.**

VISA guidelines state that a UK cardholder should have the option to pay a bill in either the currency of the country they are visiting or in pounds sterling.*** Where restaurants and retailers operate this 'service' it can result in consumers paying extra on their purchases either by making the wrong choice or not being offered a choice in the first place.

This practice has become prevalent in Spain, France and Italy****, three of the most popular UK holiday destinations, and therefore the card includes useful phrases to help customers request to pay in the local currency:

Spain: "Puedo pagar con divisa local, por favor?"
France: "Je voudrais payer en devises du pays, s'il vous plait."
Italy: "Vorrei pagare con la valuta locale, per favour."

Stuart Bernau, Nationwide's executive director, said: "By taking this guide card on their travels our customers can avoid paying more than they need to. As the only high street provider to offer free card use abroad we want to make sure our customers are warned of this so called 'service' and know how to avoid paying extra when making purchases abroad."

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 £550 million.

** Cardholders who bank elsewhere face a more complicated scenario. For certain transactions it may be less expensive for them to pay in sterling. They would have to know what their bank charges for foreign usage and currency conversion are. In addition, they would have to find out the VISA rate for that day and compare this to the sterling rate being offered by the retailer.

*** If the cardholder opts to pay in sterling the payment will be converted from the local currency to sterling. Payment in sterling prevents Nationwide from handling the currency conversion via VISA on our customer's behalf. For regulatory and anti-competitive reasons VISA is unable to prevent the operation of DCC by retailers or ATM providers but has introduced rules to govern it. Prior to the transaction, a shop or restaurant offering the service should verbally inform the cardholder of the payment choice available, but language barriers will often prevent this. This should be followed by a statement on the signature slip illustrating the choice the cardholder has made.

Nationwide can only state the VISA positioning as we do not issue Mastercard branded Debit or Credit Cards.

**** Spain includes the Canary Islands. DCC is also prevalent in Ireland, Germany and USA.