Are you paying too much for foreign currency at the airport?: Internet Scambusters #643
When you use an airport ATM for your foreign currency, you may get ripped off on the exchange rate.
Even when you're offered a "no commission" deal, you may still pay through the nose, as we explain in this week's issue.
Now, here we go...
Foreign Currency Rip-off at Airport ATMs
For some reason, changing your money into foreign currency when you're about to travel always seems to be a bit of a hassle.
You forget to ask your bank or leave it until the last minute; or you plan to change it when you arrive at your destination; or maybe you think you'll get by with just US dollars or a credit card, but then find that you can't.
Of course, you can easily change your money online these days but, one way or another, some of us end up getting our foreign currency at the airport.
And people in the foreign exchange business know that -- often offering much lower exchange rates than you might get from a bank, charging exorbitant fees and just plain ripping you off.
Oftentimes, their tactics are perfectly legal. It's just that you end up losing out heavily on how much you get for your home currency.
We've written about some of these sharp practices before in Airport Travel Scams: Watch Out For These Airport Tricksters.
But now there's a new trick in town (or, rather, in the airport) -- costly ATMs that offer to automatically issue foreign currency when you insert your debit or credit card.
Back in the day, these ATMs used to be operated by the big banks in whichever country they were located and, as far as airport exchange rates go, they were pretty reasonable.
But airport operators themselves seem to have spotted an opportunity to make money by handing over these lucrative ATM sites to other currency dealers for a fee.
Some of these ATMs promote their services as "free," which they may well be in terms of not adding on an extra commission, but they offer such poor exchange rates you end up paying through the nose anyway.
No wonder they call these locations a concourse ("con"-course).
According to one travel watchdog website, machines in airports around London were offering rates of 10% or 11% less than you'd get from a regular bank.
Ed Perkins, in his blog post Beware the New Airport ATM Scam, quoted a spokesman at Britain's Civil Aviation Authority as saying: "The worst place to exchange currency is at an airport."
But the problem isn't just limited to the UK. Perkins found similar set-ups in many European airports.
"Although plentiful, arrival-hall ATMs at these airports were all run by retail foreign exchange outfits," he wrote.
"Yes, they may take MasterCard and Visa debit cards, but they'll also take your money."
In another variation of the airport ATM rip-off -- this time spotted in Copenhagen -- you get an offer known as "dynamic currency conversion."
A screen on the ATM offers you two card options:
- To pay out the amount you've requested in local currency and then charge it to your card. This means that your card company, not the machine, will convert the amount to your home currency.
- Or, the ATM itself will instantly do the conversion to your home currency and charge that amount to your card. The cost? Zero commission, the screen tells you.
But here's the rub: The conversion rate is way below what your own card operator would give you.
In one example seen online, a traveler who wanted to withdraw 1,000 Danish Kroner from the machine was offered the "dynamic currency conversion" that would have cost him a little over $200.
Instead, he opted to let his card company do the conversion and it cost him only $188. That's about a 7% difference!
This trick is also sometimes used by retailers, and even hotels in foreign countries, who offer to do the conversion and charge you for your purchase in dollars -- usually with the same costly result.
As a general rule, you should always leave it to your card company to do the conversion. You'll usually get a much better rate. Nonetheless, we recommend that you always check what the best deal is yourself -- things change and there are huge variations at different locations and at different times.
It's worth noting too that airport ATMs can be vulnerable to card skimmers and other money-stealing devices, especially if they're located away from public view, where crooks have the time and opportunity to tamper with them.
Most recently, travel blogs have been teeming with reports about a series of thefts from bank accounts after using ATMs at Rio de Janeiro's airport.
If you need foreign currency for your travels and you want to use an ATM, you're far better waiting until you clear the airport.
Wait until you get into town, wherever that may be, and find a big bank with an inside ATM where you can usually withdraw money easily with your card.
These days, if you have a smartphone, it's usually easy to locate a local bank.
Better yet, put currency changing at the top of your travel to-do list and get the currency from your bank before you go!
Foreign currency scams are just one of many tricks to be on the lookout for when you're traveling -- so watch out for our latest list of travel scams here at Scambusters in a few weeks.
Alert of the week
Staying with a travel theme, watch out for an email message supposedly from an airline with a subject heading something like "Your order is processed."
Inside the message you'll find details for a flight and a link to "download your ticket."
In reality, it's either an attempt to steal personal info or to load malware onto your PC.
Unless you really booked the flight listed, you might still be tempted out of curiosity to click that link. But don't!
That's it for today -- we hope you enjoy your week!