Not a Londoner? Then you’ll have to pay more for your holiday money
Holiday money companies are tricking families travelling overseas into paying £720 million in unnecessary fees.
prepaid cardsAccording to Money Mail, the traps are designed to target the hundreds of thousands of people heading abroad now that the 2012 Olympic Games have come to an end.
One scheme involves providing poorer exchange rates to jetsetters who live outside of London or travel from airports offering cheap flights.
Travel money firms and banks already pocket £1.1 billion from converting the £27 billion that British holidaymakers spend abroad annually into local currency, reveals the Office of Fair Trading.
But travellers are unknowingly paying an extra £40 on every £1,000 spent on holiday, the research found, due to sly tricks which see travel money firms and banks taking an extra £722 million.
Justin Modray of financial advice website CandidMoney.com described the situation as a “queue of companies lining up to fleece travellers”, while chief executive of currency company FairFX said that the “unscrupulous tactics” employed by leading foreign exchange firms cause travellers to “lose out”.
In the current climate, £500 can buy €635, which is €60 more than in August 2011. But many families living outside of London may find that their money doesn’t go that far.
With costs hiked almost everywhere outside the capital, holidaymakers can be left with €15 less on £500 exchanged – something which many people do not realise.
The Post Office – which is used by two in five travellers to buy holiday money according to consumer group Which? – admitted via a spokesman that exchange rates in some cities were worse because of weaker competition.
Exchange rates are also routinely cut by currency firms at cheap-flight airports including Luton and Birmingham. Travellers at these minor airports receive €26 less on every £500, say Money Mail, which carried out a direct comparison last Friday.
The news comes as many Brits are jetting over to Europe on a late summer break to take advantage of a weak euro.
Anyone who is planning to go on holiday this summer may want to consider taking a pre-paid credit card to stay on budget. As money has to be loaded on before, it can help to prevent overspending.