Re: Foreign Currency Conversion Fees

nr wrote:
I recently made a purchase from a company in Canada using my
Mastercard. When the charge appeared on my credit card statement,
there was an additional 1% added to the purchase amount. My banking
institution told me the additional amount was added by Mastercard. MC
calls it a 'foreign currency conversion fee' and assesses it on all
charges made outside the US.

In the above case, the charge and the remittance made to the company
were in US dollars, so there was no currency conversion.

Does anyone know who has oversight responsibility for Mastercard,
Visa, etc. so I can complain to the proper authorities? I've spoken
with folks in the Treasury Department, Federal Reserve, and FTC; and
they all don't have a clue.

You're lucky that your issuing bank didn't add another 2% over and above the 1%. In fact if the purchase really was in $US this may be the reason it was only 1%.

Most banks add their own 1% or 2% fee on top of the 1% charged by Visa and Mastercard (a few don't). However due to the DCC (dynamic currency conversion) scam (a third party does currency conversion to $US at the time of purchase at a horrible exchange rate far exceeding 3%), U.S. credit card companies weren't getting their 1% and consumers were getting screwed by the DCC companies with fees of about 5% built into the exchange rate. So now the 1% fee is charged on all purchases made outside the U.S. regardless of the currency, so the credit card issuer gets their fee no matter what. There were notices sent out earlier this year about this change in terms. If you really want to get the maximum screwing, use a MC/Visa from a bank that adds on their own 2%, _and_ allow the merchant to use DCC. You'll end up at about 8% in fees. Actually, what isn't clear is if the bank's 1-2% is still added when you use DCC, or only the Visa/MC 1% is added.

There's no one to complain to because nothing illegal was done.
.

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