Insights for consumers
When you withdraw foreign currency from an ATM using a multicurrency travel card, the ATM may process the transaction in the local currency even if you select another currency. It is better to withdraw cash from an ATM in a country’s local currency once you arrive.
Jeremy requested euros from an ATM in the UK
Jeremy wanted to withdraw €300 from an ATM in the United Kingdom using his multicurrency travel card. He had several currency accounts or ‘wallets’ attached to his travel card. He had plenty of money in his euro and New Zealand dollar (NZD) wallets, but almost none in his Great British pound (GBP) wallet.
What went wrong with Jeremy’s multicurrency travel card withdrawal?
Jeremy found an ATM that advertised the ability to withdraw euros, so he proceeded with his withdrawal of €300. Jeremy assumed the withdrawal would come from his euro wallet. However, the ATM processed the transaction in GBP, the local currency of the UK. Because Jeremy didn’t have enough GBP in his GBP wallet, his travel card provider automatically converted money from his NZD wallet to cover the withdrawal. This meant the money was converted twice. Jeremy calculated that the double conversion cost him around NZD200 more than expected.
Jeremy complained to the travel card provider, arguing that the transaction should have come from his euro wallet.
The travel card provider’s response
The provider said they had followed their usual process and had no control over how the ATM chose the currency.
The travel card provider offered to refund the fees they had charged on the transaction (NZD9.35) as a goodwill gesture.
Jeremy did not accept the offer and complained to Financial Services Complaints Limited (FSCL).
Was the travel card provider at fault?
During our initial review, the travel card provider explained that because Jeremy used an ATM in the UK, the ATM provider defaulted to processing the withdrawal in the local currency, GBP, instead of taking money from his euro wallet.
The travel card provider said that they were unable to tell that Jeremy had requested a withdrawal in euros. When the travel card provider received a request to debit the GBP wallet, there was not enough money in that wallet. This led to the conversion being made in the base currency, NZD, as set out in the travel card provider’s terms and conditions.
The travel card provider said they had not done anything wrong. However, they could understand Jeremy’s frustration and offered him a goodwill gesture of NZD100.
Jeremy remained concerned that there was a fundamental flaw in the travel card provider’s system – that an ATM could pay funds in a currency other than the one a customer selects and holds currency for.
We agreed that the travel card provider had processed the transaction in line with their terms and conditions. We were unable to determine if the ATM provider had failed to follow Jeremy’s instructions to withdraw euros from his travel card, without seeking more information about the transaction.
How the complaint was resolved without a full investigation
We asked Jeremy if he was willing to accept the travel card provider’s offer of NZD100.
Jeremy accepted the offer, and the complaint was resolved without the need for a full investigation.
