Australians are being ripped off on currency exchange

Australians are being ripped off by poor currency exchange rates and fees, an analysis by researcher Capital Economics shows.

The researcher estimates in 2016 Australian holidaymakers and work travellers paid well over $1 billion in fees and poor exchange rates on their currency exchanges.

This figure includes more than $110 million in poor exchange rates and fees for cash exchanged before travelling overseas.

It includes more than $930 million on dud exchange rates applied to card purchases abroad, and almost $170 million in charges for overseas cash withdrawals.

It’s not only individuals who are losing out. Small and medium-sized businesses are forgoing almost $150 million a year in poor exchange rates on their exports.

Big banks expensive

The research confirms that the most costly way to buy foreign currency is through the big banks.

“Most banks tell their customers that they only pay a small upfront fee for international payments,” says Taavet Hinrikus, the chairman of TransferWise, a money transfer service that sponsored the Capital Economics research.

“But in reality customers pay much more. Huge hidden charges are taken in the form of the terrible exchange rates, often without the customer realising.”

And it’s not only travellers who are paying the price. Those transferring money overseas to loved ones are also getting a raw deal.

Capital Economics says remittance outflows from Australia totalled $9.8 billion in 2016.

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Source: Australians are being ripped off on currency exchange – The Sydney Morning Herald