Mark-up fees on ATM currency exchange transactions must be disclosed

23/08/2018 12:31

Banks must clearly disclose and create awareness on the fees associated with Master Card transactions locally.

A consumer recently withdrew money from a Westpac ATM with no clear information provided on the costs the customer would incur when choosing Dynamic Currency Conversion (DCC).

When making a withdrawal the consumer was provided two options – a withdrawal without conversion or a withdrawal with conversion using DCC.

DCC is a service offered by the merchant (card issuer) that enables cardholders travelling abroad to choose whether their transaction should be completed in either the local or the billing currency. The billing currency being the currency of the country of the card holder.

The consumer was surprised to learn that in choosing the DCC option she had incurred extra costs. Furthermore, the consumer claimed that at no point in time did they disclose fees that would be borne by the customer by accepting to proceed with the DCC option.

After queries were extended to the bank it was revealed that while exchange rates are determined by Master Card, the bank also charges a mark-up fee. The bank claims that the mark up fee was charged in agreement with MasterCard.

According to the MasterCard DCC Compliance Guide, each screen message of an ATM or unattended POS terminal offering DCC must include any other fee that can be charged to the transaction and the reason for this fee being applied.

Failing to disclose such crucial information is a blatant disregard by the bank of their responsibility towards their customers. Consumers who are unaware of the associated fees, would naturally choose to move forward with the transaction with the assumption that the fees associated with both choices would relatively be the same.

Choosing DCC in this case cost the consumer more than if she would have used withdrawal without conversion- a charge that she did not know about until reading her bank statements. A normal withdrawal without conversion would have cost her only a $15 charge by the bank.

The banks failure to disclose associated fees seems to be a scheming tactic aimed at getting money from consumers.

Banks must alert their consumers of the charges and ensure that their customers understand what choosing the DCC option would entail and how much more they would have to fork out as a convenience fee.

Any consumers facing similar issues are urged to contact the Council on 155 or email