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Different exchange rates applicable for different methods to load a travel card

Duane and his wife had planned a big trip around Europe and the UK. They decided that they would use a travel card to manage their money overseas.  

Duane transferred $19,350NZD onto the travel card and converted their NZD to Euro and GBP. However, Duane noticed that the exchange rates used to convert their NZD to Euro and GBP were less favourable than the ‘dashboard’ exchange rates advertised on the travel card’s website that day. He calculated that the difference between the dashboard exchange rates and the exchanges rates he received totalled approximately $900NZD.

The travel card company told Duane that the dashboard exchange rates on their website were not the applicable exchange rates when Duane converted his NZD to Euro and GBP.

Duane felt he had been misled and complained to FSCL.


Different exchange rates

There were two different ways money could be loaded onto the travel card.

The first way was through internet banking. This was how Duane had loaded his travel card. He had logged onto his online banking account and transferred $19,350NZD into the travel card company’s bank account.

The transfer took three days to process and to appear on Duane’s travel card account. Duane then logged into his account and converted his NZD to Euros and GBP. It was only at this point that Duane noticed that the exchange rates being used to convert NZD to Euro and GBP were less than the dashboard rates advertised on the website.

The second option to load money onto the travel card was directly through the travel card’s website and is called ‘online reload’. Cardholders can go onto the website and enter in the amounts of currency they want to purchase. For example: £600 and €800. The cardholder then pays the amount of NZD required to purchase these currency amounts. The exchange rates used for loading the travel card through this method are the dashboard exchange rates advertised on the website.


The travel card company’s position

The travel card company said that it had clearly disclosed the applicable exchange rates at the time Duane logged into his travel card account to convert his NZD into Euro and GBP. The travel card company said that if Duane was not satisfied with the exchange rates being offered, he could have chosen not to proceed to convert his NZD to Euro and GBP.

The travel card company also said that, under the dashboard rates it was stated:

The exchange rates set out in this website apply to reload transactions that are booked on this website only. Different exchange rates will apply to card loads conducted directly via Bank Transfer or Bill Payment. 


Duane’s position

Duane said that he had known that there was a different way to load currency onto his card which would have given him a more favourable exchange rate, he would have loaded his currency through this method.

Duane said that when he was sold the card he was not told about alternative options for loading currency onto the card. Further, by the time he had loaded his money onto the card and discovered that the applicable exchange rates were less than the dashboard exchange rates, it was too late to look at other travel card options as he was due to depart New Zealand in the next couple of days.


Our view

We considered that the disclosure about when the dashboard rates would be the applicable rates could have been better. The disclosure paragraph the travel card company was relying on was in very small font, at the bottom of the website, and below information such as the travel card company’s incorporation details.

In our view, the warning about dashboard rates only being applicable for online reloads was important information that should be easily visible for cardholders. 

At the time we were considering this complaint, the travel card company was in the process of updating its website. It updated its website so that under the information about loading the travel card via internet banking (the method Duane used), it read: “Transfers can take up to 3 business days. This method will not guarantee the exchange rates advertised on our home page”.

However, we were not satisfied with this wording. In our view, this suggested to cardholders that any difference between the exchange rate used for loading the travel card by internet banking, and the dashboard exchange rates, would be due to any market fluctuations over the three days it took for the transfer to be processed. However, this was not the case.

The exchange rates used to load the card by internet banking would always be lower than daily dashboard rates advertised on the website. This is because the travel card company adds a higher margin to the internet banking exchange rates, making these exchange rates less favourable than the exchange rates used for online reloads.

We considered that the travel card company should disclose this information so that cardholders have this information at the time they are deciding which method to use to load their travel card.



Unfortunately, while we strongly suggested the travel card company improves its disclosure, the travel card company disagreed – it considered that its disclosure was adequate.  

To resolve the complaint, the travel card company offered to pay Duane $500. Duane said that he was happy to accept this amount although he would not be using the travel card for any future overseas trips.