Credit Card Conversion Fees

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Feb 10th, 2003, 06:30 AM
  #1
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Credit Card Conversion Fees

Interesting article in today's Wall Street Journal...

MC and Visa are about to lose a multi million dollar law lsuit for failure to disclose currency conversions on credit card transactions since 1996. Interesting, suit was filed in California and since Visa is located in California, it affects all Visa cardholders. MC is not headquartered in California so suit only affects California MC holders.

Article further goes on ot say there is on going court action against those credit card issuers such as Citibank, Chase, First USA which charge an additional 2% for credit card transactions. When asked what people are being charged the additional 2% for, bank spokespeople came up with added fraud on foreign transactions and the cost of maintaining toll free numbers for customers to call regarding problems with foreign transactions. Nothing about the costs of currency conversions which this 2% fee supposedly covered.

Ah the gall...wonder how much money we will all be getting back.
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Feb 10th, 2003, 06:36 AM
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I think we all knew the charge card co.'s were not doing the right thing. And I believe someone here mentioned that if one has a refund transaction the card co.'s don't refund the customer the conversion fee unless the customer asks them to.

It's great that for once the decision is on our side. But of course the co.'s are going to appeal.
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Feb 10th, 2003, 06:36 AM
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>...wonder how much money we will all be getting back.<

Probably $30.00 ea, but only if you have receipts and the total number of people applying is less than a million.
The lawyers, however, will probably make about $100,000,000.

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Feb 10th, 2003, 09:12 AM
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Actually, they have a point when it comes to fraud on overseas charges. I handle some credit card issues for my company, and there's very little the Visa/MC can do when we get hit with illegal charges from overseas. They eat the charges.

After all, companies pay higher rates on charges done over the phone or by the Internet than for charges done in person. There's a higher incidence of fraud when the charges aren't done in person.

That said, they still should have done a much better job in disclosing the additional fees.
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Feb 10th, 2003, 10:25 AM
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The 1% fee is described in the information I received from my credit card companies--I have both Visa and MC. Are there some companies that didn't do so?
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Feb 10th, 2003, 10:35 AM
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They almost all do now...the complaint is that besides what is buried in one of the 20 clauses of your cardholer agreement, the lawyers who brought suit claim there should be disclosure on the statements just what the fee is and for those banks nipping people for the extra 2%, they should put that on the statement too.

The interesting thing is that I am sure each of the millions of people who the class action suit is being brought in favour of will receive 20 cents each and the lawyers will get millions. Ah the American tort system.
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Feb 10th, 2003, 11:49 AM
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There is certainly room for improvement in our tort system, but the fact is that a case like this, with millions of people being "harmed" to a very small degree, would never be brought unless there was some way of compensating the lawyers.
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