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Forums » Currency & Credit Cards » Credit Card charges now AUTOMATICALLY in USD

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mquartz

Credit Card charges now AUTOMATICALLY in USD

by mquartz »

We have long known about the practice of being offered to put through a charge not in the local currency but in USD, no matter where in the world you are doing the transaction. It is sometimes called "dynamic conversion", usually offered as a "convenience", as doing the customer a favor, and many fall for it. The exchange rate that is being applied to such a transaction by the vendor is of course not as favorable to the customer as would have been the exchange rate that the credit-card issueing bank or its agencies apply.

Just now, on my trip in Poland, I have come across a new version of this, an AUTOMATIC conversion of the local currency into USD, where you are given no choice, and - what makes it practically fraudulent - a wording on the signature slip that says, below the line on which I sign, and I quote:

(begin quote)I accept that I have been offered a choice of currencies for payment. I accept the conversion rate and final amount and that the final selected transaction currency is USD. I also accept the my choice of currency is final. Currency conversion provided by eSERVICE S.A.(end quote)

I was not given a choice, the subject never came up, I was simply handed the slip to sign like with every credit-card transaction.

This has happened at the official ticket counter of the Polish railways, and also in a drug store.

A part of the problem for Americans is the sad fact that, even though we now all have a chip in our credit cards (well, most of us anyway), that chip is worthless in the sense that our US-issued cards are still "chip-and-sign" cards. Yes, you can now stick the card into a machine rather than having it swiped, but you still have to sign. If, instead of signing, you apply the PIN to the transaction, the transaction is automatically treated - by the credit-card company - as a CASH ADVANCE which incurs extra fees, finance charges, from the moment of the transaction, not from the next statement date! Call your credit-card issuer if you don't believe me!

Now I wonder, if we could use the chip-and-pin method, would the currency conversion still be automatically applied?

This business with signing the receipt and at the same time signing an "agreement" to the currency conversion is, in my view, fraudulent. Upon my return I will bring this up with - in my case - Chase and see what they say. Being signatories to the VISA organization, they may or may not be interested.

When you're standing in a long line of customers and it is your turn to pay, you cannot very well protest, hold up the line, and put the poor attendant through hell - they wouldn't even know what you're talking about when you point out that you are not signing because you are not agreeing to the automatic conversion being applied. His machine spits out the receipt, he needs a signature, he has no control over it, so if you're concerned, take out local currency in the ATMs (usually called "bancomat") and pay cash, in the local currency. Then take this up with your credit-card issuer.

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billiv

RE: Credit Card charges now AUTOMATICALLY in USD

by billiv »

USAA replaced our nice chip and pin card that worked so brilliantly on our last few overseas trips with a chip and signature card last week.  After reading your posting, I called USAA, and they assured me that as long as I was not withdrawing cash from an ATM, using the PIN would not be treated as a cash advance.  Of course, the person I talked to might have made a mistake, but that is what she told me.

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billiv

RE: Credit Card charges now AUTOMATICALLY in USD

by billiv »

This sort of thing has been going on for a long time. Unless something changed recently, it isn't supposed to be automatic--they are supposed to give you the choice before finalizing the payment.  But many do not. 

In Germany, Austria, Switzerland, and France we were always given the choice before they finalized the deal. 

But in Spain and Italy, sometimes they would "forget" to ask and automatically use DCC.  Then they would come up with all sorts of fantastic reasons that they could not cancel the transaction and redo it.  Unless it was  a really small charge, I would put them through the wringer over it--and eventually they would suddenly remember how to cancel the sale and do it again in local currency. I rather enjoyed making them squirm--I would just keep insisting, show them the VISA rules (I learned to carry a copy of that section with me) and get louder and louder until their memory came back to them.

If it was just a small charge that wasn't worth a few minutes to fuss over, I'd just make a remark about them not following VISA's requirements and making a point of telling them that I'd report them to VISA.  And in two cases where the merchant was a real jerk I did--a VISA rep did call me back to verify the info I sent them. The VISA rep told me they take it seriously and would make an "educational" contact with the merchants. I guess there would be the remote possibility that a merchant could lose VISA (or Mc or AE) credit card acceptance privledges if she or he got too many complaints.

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mquartz

RE: Credit Card charges now AUTOMATICALLY in USD

by mquartz »

Thanks for giving me the idea of carrying the VISA rules. I'll have to ferret them out. Is it easy to find, or buried? I had never come across a situation where not only did nobody ask me, but the signature slip already had the verbiage printed on it that I quoted. robmac2@ix.netcom.com

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billiv

RE: Credit Card charges now AUTOMATICALLY in USD

by billiv »

Hi, mquartz.  I called my credit card company and they snail-mailed me the info.

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