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Extra fee for "Overseas Transactions"

All of a sudden, my Bank (Lloyds TSB) are charging me a 1 fee when I use my Debit Card (Visa Delta) for "Overseas Transactions". That is, anything I buy online (services or products) that are priced in Dollars and/or billed by companies abroad. It appears next to these transactions, but listed as a seperate charge, on my bank statement.

They have never done this before (been using said card for such transactions for at least 3 years) and, to my knowledge, have never let me know that they intended to start levying such a charge.

Can they do this? Did I miss some announcement somewhere that this would likely start happening? What should I do next?

Ta, D.

Reply to
David Wright
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Yup. This is happening increasingly. Been happening for a while in the US AIUI.

Are you sure they didn't bury it somewhere in an update to T&C's cunningly hidden in what looked like junk mail?

Change to a bank which doesn't charge, eg Nationwide?

The reason for the change is the increasing prevalence of Dynamic Currency Conversion, which has hit VISA, Mastercard, and the banks' lucrative currency conversion markups. So VISA, Mastercard, and some banks, are introducing "foreign use" fees, where you get charged even if you pay in GBP abroad. I think VISA and Mastercard have reduced their exchange rate markups to partly make up for this. You may find your bank have reduced their exchange rate markup.

The one good thing that may come out of this is the death of DCC....

Reply to
Andy Pandy

He said it included things priced in dollars so this doesn't apply.

tim

Reply to
tim (moved to sweden)

It does. They apply the charge to all foreign transactions regardless of currency. The bank should have reduced the foreign exchange markup, as VISA/Mastercard have I believe.

Reply to
Andy Pandy

No the fact they've lost the lucratice currency conversion doesn't apply.

They get that and the new charge, so he is being well ripped off.

tim

Reply to
tim (moved to sweden)

It does, because they lose it when DCC applies, ie if/when he pays in GBP abroad.

Reply to
Andy Pandy

What actually happens when a retailer overseas carries out a transaction in GBP? Does he get paid in GBP by his local bank, or does he get paid the equivalent amount in his local currency? If the latter, then presumably the conversion markup is still there.

Chris

Reply to
Chris Blunt

AIUI, the transaction goes via a DCC operator, who converts the currency with a markup. He then gives the retailer the amount in the local currency with a bit of commission on top, to encourage the retailer to select the option to convert the currency. Theoretically the currency should never be converted without the customer's consent, but it often is, since the retailer benefits.

The customer's card is then charged in his home currency - meaning that VISA/Mastercard and his bank have lost out on the exchange rate markup they would otherwise have got. So that's why they are introducing foreign usage fees, as well as or instead of part of the exchange rate markup fee.

Reply to
Andy Pandy

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