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The exchange rate you see isn’t the exchange rate you get

Abbey was planning a trip to Australia in February 2017. She decided she would use a travel card to exchange her New Zealand dollars for Australian.


Currency Exchange

On 20 January 2017, Abbey loaded NZD $2,000 onto her travel card. Based on the exchange rate shown on the travel card provider’s website, Abbey expected to receive AUD $1,832. But when Abbey looked at her balance, she only had $1,605.



Abbey emailed the provider, asking why she had received $227 less than she expected. Abbey wanted an explanation from the provider, and a credit for the AUD $227.

After several emails and phone calls to the provider, the issue remained unresolved, so Abbey complained to FSCL.


Abbey’s view

Abbey said she received a much worse exchange rate than the provider was advertising. She understood that exchange rates fluctuated, but she checked the exchange rate on the provider’s website less than five minutes before making the transfer. Abbey was also unhappy that the provider had failed to explain the $227 shortfall.


The provider’s view

The provider said it applied the correct exchange rate. It explained there were two ways a customer could load money onto their travel card.

The first method involved using the provider’s website to purchase AUD for the travel card. The provider tells the customer the number of NZD they need to deposit into the provider’s bank account. If the customer pays the money within 4 hours of having the transaction approved, the money is exchanged. If the customer uses this method, the exchange rate listed on the provider’s website is applied.

The second method involves loading NZD onto the travel card, and then the customer transfers the NZDs from their NZD ‘purse’ into their AUD ‘purse’. When a customer uses this method, a less favourable exchange rate is applied, because the provider charges a significant margin. Abbey used this method, so her exchange was at a much lower rate than was listed on the provider’s website.

The provider said all this information was clearly stated in its terms and conditions.


FSCL’s review

We found that Abbey’s travel card account started out with a negative balance of -$123 AUD. Abbey had received a worse exchange rate than she expected, but most of the missing $227 was the result of the existing negative balance. Abbey said there should not have been a negative balance, and the provider could not explain it.

Also, the provider’s terms and conditions mentioned the two transfer methods, and explained the different exchange rates and fees that apply. However, the explanations were hidden in the middle of a long and complicated document, so most customers would never see the explanation or know about the different exchange rates.

Our view was that the provider should warn customers about the different rates and margins whenever the customer makes a transfer. Without a warning Abbey, and most customers, would assume they were getting the exchange rate listed on the provider’s website. Hiding the information in long and complex terms and conditions was potentially misleading.



We said the provider should have given warnings about the different methods, exchange rates, and the margin. It also had not explained the -$123 negative balance. We recommended the provider credit Abbey the full AUD $227.

We also considered the provider’s delays and lack of explanations for Abbey were unacceptable. We recommended that provider should pay Abbey $250 NZD as compensation for her inconvenience and the time she had spent pursuing her complaint and trying to get an answer.

Abbey and the provider both agreed with our recommendations. Abbey accepted payments of AUD $277 and NZD $250 as a full and final settlement of her complaint.


Our insight

When you sign an agreement, the fine print is important. We recommend thoroughly reading the terms and conditions for any financial service you sign up to.

At the same time, service providers shouldn’t be advertising one product, and using fine print to deliver something else. If you discover that a company’s terms and conditions significantly change the deal you agreed to, it may be worth lodging a complaint.