"I am not yet 100% convinced that writing something on the credit card piece of paper will prevent dynamic currency conversion..."

It doesn't prevent anything. If the merchant insists, the charge will go through in USD with the rip-off-mark-up added.

The magic happens when you dispute your statement. If the merchant can't produce the signature document, the charge is reversed. If the merchant DOES produce the signature document, your notation clearly states your intention to be billed in local, and the transaction will be reversed and re-computed with the correct exchange markup.

And the merchant will probably get a ration from the card issuer or network.
---------------------------------
I have said this before, but I think the card issuers are missing out on big revenue when people who want to pay in local revert to cash.

If they would simply inform every cardholder what their rights are (and maybe include a printed card with every monthly statement), more people would decline DCC and the networks would get to charge the merchants their discount points. It could be millions.

By (in effect) forcing their customers to go to cash, the merchants are getting to keep the discount - so the mere threat of DCC benefits them.

I just received another email from the owner of Simply Amsterdam, after sending several lengthy discussions of how this whole scenario is playing out. Obviously I've opened a "can of worms" that he (she) is exploring. As I suspected the reason for them using this newer processor is because they charge them (the merchant) a much lower percentage on the credit cards than the bank (or Visa services represented by their bank) does.
Here is the email:
>>>>>>>>>>>>&g t;>>>>>>>>>>>> >>>>>>>>>>

"Thank you for your comments - I had no idea about this whole thing
going on with 'Dynamic Currency Conversion'.

As I understand it now (but I must say, it is rather complicated), the
concept is controversial, because it may be disadvantageous for
travellers. Or it may not, it appears to depend on the difference (if
any) between the percentage charged by the merchant's company and the
customer's bank.
I can see how banks may not like this development, as they do not get
to charge the exchange fee.

Also relevant is the fact that Easy Payments Service charges our
company a much lower fee than the previous companies we worked with.
Because of this, we abolished the 5% surcharge on balance payments,
charged if the balance was paid by credit card and not in cash or by
bank wire. We used to do this, as we had to pay up to 5% on every
credit card payment. We were glad to get rid of this surcharge,
because it is customer-unfriendly and also because it induces people
to run around with (sometimes) large amounts of cash.

If I see it correctly, it seems the DCC development moves part of the
profitability of exchanging foreign currencies toward the merchant
that the traveller deals with, thus making it possible for the
merchant to become more competitive (to the detriment of the banks).
In a competitive market this should, in general, then be advantageous
to travellers.
I also see how DCC could be abused, so if it is a blessing, it is a mixed one.

Anyway, thank you for bringing this to my attention.

Kind regards."

neo...i'm not sure what is legal or illegal (surely it depends on the countries involved). anyway, it is not the same thing to say that all transactions in different currencies are illegal. the reason is that you have an agreement with a merchant to purchase something for 100 peanuts...not 60 walnuts or whatever someone says is equivalent (would i expect a merchant take my £100 coat as payment for £100 bill without discussion?). you then have an agreement with your CC company that all foreign charges will be converted to the currency of your CC account according to the rules of the card.

so the agreement with the merchant is honoured if he charges you €50 when the agreed price was €50. your agreement with the CC company is honoured when they convert your charge according to the rules that you agreed to when you signed up for the card. but the merchant (OR his agent - in this case) charging walnuts when the agreement was in peanuts is NOT honouring the deal.

Exactly. That's what I'm saying, as no one was charging in anything but the local currency in my case.
What I am saying is the the merchant's agent was only doing exactly what every merchant's agent does. Pay him in his local currency and then convert the charge to dollars to the bank -- the same that Visa does for every other charge. I still say that to suggest that this merchant's agent did anything different from what VISA services does to every other charge is simply wrong. They both do EXACTLY the same thing.

>>>>>
the same that Visa does for every other charge
>>>>>

unless i'm missing something, you have an agreement with visa to convert foreign currency purchases according to agreed rules. you have no agreement with the merchant's third party agent. the fact that his terms might be better worse or the same than the terms you agreed with visa is not the issue nor is it any of his business.

the issue is that you did NOT agree to have your charge be presented to your CC company in anything but €. you agreed a price in € and that's what the charge should go through to visa as. this third party agent could have given you any exchange rate he wanted to (because there are no pre-set rules that you agreed to).

Well, there is another way of looking at this. Actually I don't have any agreement with Visa. I have an agreement with Citibank regarding my MASTER CARD.

So when a European merchant charges me in euro, and sends it to their bank and the bank contracts with VISA services to transfer the debt to the US, and Visa service then translates the euros to dollars and sends that dollars amount to Citibank along with a one percent charge, then I'd say that is no more an agreement that I have with Citibank than if another firm called ABC does exactly the same thing. I have no control over whom the merchant uses to send the charge to Citibank -- whether it is a Dutch Bank, or Visa Services, or ABC services. And my credit card certainly doesn't specify that I will only be responsible for transfers done by Visa Services nor that I won't be responsible if they were done by a bank or another financial service that operates in the same way.

As I said, I will believe it when and if I see a contested charge result in a refund of some type.

Until then I shall remain skeptical. In the meantime, I have no intentions of accepting a DCC. Hopefully I shall remain forever skeptical because I will ask in advance and refuse DCCs unless in a real pinch. Like my flight home is leaving and I don't have time to argue or I am unable to argue because of the language barrier.

It has been quite a few years since I have been "dynamoed". The reason: I am now an informed traveler. Stand your ground and insist on having it your way.

I'm assuming that the last two posts purposely had nothing to do with my situation. I repeat. I was not a victim of avoidable DCC. I made a charge in Amsterdam. The charge was in Euro. Although I did not sign the slip because I wasn't there, that is minor. If I had been there the amount still would have been in euros, not dollars. There is no way, I can possibly think of to avoid this type of DCC -- done by a processor just like Visa after the fact.

Bob - As I stated above, I can't find anything on Mastercard about their DCC policy. Do they have one? I had this happen in Spain a few years ago at a hotel. I was in a hurry, but did ask them to change it to Euro, but all of a sudden they only spoke Catalan. Nothing I could do if I wanted to make my train.

When I got back to the states I contacted Mastercard International office. I filed a complaint, but nothing ever came of it. They said it didn't matter how or even if the slip was signed. Once it's presented for signature, it's already processed.

Perhaps each bank that issues cards for Visa and Mastercard have different policies for DCC. I've noticed my DD's CU Visa doesn't protect her on purchases made over 100 miles from home, but mine does. I had assumed all cards had protection for purchases.

kybourbon...

You lost your leverage when you sign the sales slip...in a billing error dispute if the merchant cannot produce a signed sales slip, you win the dispute.

Neopatrick...again I am not sure no matter what the people in Amsterdam say that if you are present in person, they can pull the dcc scam on you. As noted regs require that when your transaction is made in person, the sales draft must include both the local currency and the home currency of the card holder clearly indicating the exchange rate being used. The problem, as I pointed out, is the growing use of the internet where you don't physically sign a sales slip but give your consent to the purchase...I and am sure some others have had, in recent memories, cases where my credit card info was stolen, probably by a waiter in a restaurant usingone of those terminals and several charges suddenly being made on the internet...it is quite true that internet merchants have no idea what happens to the charge after it is processed...as noted for my very modest service (I may have a total of 40 clients and it is a very seasonal service which ends on April 15) I may have 3 or 4 clients who wish to pay via credit card...I found on the internet a provider known as propay.com...they don't charge very high rates to me and their annual fee is very modest..more than worth it to me for even those few clients who insist on using plastic. I have no idea if they provided me with a foreign credit card what happens to the charge, whether it would be converted to their currency. I am not required to provide a sales slip to them (although I do print one).....and we don't even know if this is dcc and won't know until the end of your billing cycle so there is no use in getting upset right now...at the end of the billing cycle if indeed dcc was performed on you then institute billing error dispute for the foreign finance charge alone and cite the provision of not being given a charge. As I said before, since the amount involved is relatively small, less than $20, it would be my bet Citibank will simply eat it then to antagonize a good customer.

Modern technology has many good things to offer us but then there are downers such as this nonsense.

BTW I would never use cash to avoid dcc. I just don't understand why anybody would ever suggest that. At the same time the euro exchange rate was around $1.31 to the euro, with the 3% charge that would bring it to ablut $1.35...the 5% charge with dcc would bring it to about $1.3 or thereabouts....I would bet the cash rate for euro USD exchange would be in the vicinity of $1.42 or $1.43 so even if you are scammed by these vermin, you still come out ahead using a credit card as opposed to paying cash all the time.

xyz, I'm not sure how I can make this any clearer. When you sign a credit card slip in Europe in euros and it goes to Visa services to be processed and sent to your credit card holding bank, VISA is the one that changes it from euro to dollars. In my case that is EXACTLY what happened. It has nothing to do with the merchant changing from euro to dollars. The ONLY difference is that the merchant doesn't turn it over to VISA to process, they turn it over to another independent processor who does the same thing that VISA does. Period.
Saying that this company used DCC is the same as saying every transaction in Europe handled by Visa services is also DCC as they DO convert in the process from euro to dollars.

On my arrival in Amsterdam, I can use a credit card to pay the balance. If I do, it will show as 475 euro. I will get a slip and sign it for 475 euro. The agency will deposit it with their processor who will put 475 in their bank account. But when it appears on my Citibank statement it will show in dollars, apparently with the 3% added, not the usual 1% added by Visa, because Visa didn't do it, this other company did it.

You are wrong if you suggest I tell them to take my credit card and charge in EUROS, because that is EXACTLY what they are already doing. There is nothing the agency can do differently, except to break their contract with their current credit card processor and switch to a new bank. They are NOT going to do that for me. As their email shows above, they are saving money by not using the old bank processing company which charged them up to 5% for every credit card they take, which is also why they dropped the 5% fee to customers putting apartment rentals on a credit card.

This is a far cry from what you and others are describing as DCC. If I complain about this as DCC then everytime you charge in Europe and your credit card company shows a 1% added by VISA then you should be complaining about THAT form of DCC also, because it is exactly the same thing.

Neopatrick...

In all due respect to you, and I really don't want to get into an argument about it at this point, at this stage you really don't know what happened despite assurances from various people who may or may not be knowledgeable and won't really know until the billing cycle ends.

The curve ball in this, I believe, still remains it is an internet on line transaction and not done in person. I will reiterate if this happened ot me, and believe me I know it is easy to try to put oneself into somebody else's shoes, I might scream bloody murder. It will be interesting to see what happens if you do it with the same apartment in Amsterday...what the sales slip will say.

And again, most credit card merchant accounts are no longer with banks..they are with credit card processors such as planet payments...the advantage being you can take MC, Visa, Discover (USA only), Amex and don't need separate accounts...planet payments does the processing and after adjusting for whatever merchant discount you have negotiated places the funds in your bank account...in the past the system required merchants to deposit sales vouchers into their accounts in their bank...now once the transaction is run through the terminal it is on the way to being processed (unless it is voided by the merchant) nobody looks at sales voucher anymore.

The DCC scam involved basically what you were saying...the merchant ran the transaction in their pos terminal which gave them a local currency amount and a converted amount and then asks the merchant whether the customer wishes to accept the conversion (some of the clerks are taught as we know simply to press the button saying customer accepts...I once asked a manager why their clerks are told to do this and he said it would take too long to ask every customer what they wished to do as there would be questions...he kept insisting this is a service to the customer and the rate used is competitive)....in any event in the familiar dcc scam, the cc processor deposits the amount in the merchant's account and then electronically transfers the charge to a banking institution it has contracted with in the country of the cardholder's currency in this case a US bank....this is where the whole controversy comes in...visa and the banks now insist they have the right to charge the extra fee as it is a foreign transaction.

I understand what you have said...it was all done in the backroom so to speak but I am still not sure we know really what's legal and not legal...I go back to what the visa web site says which Robespierre has pointed out...you must be offered a meaningful choice to pay in your currency before a merchant can perform a dcc transaction...now we can nit pick and say the merchant did not perform the decc transaction here but it would be interesting.

I suspect most online credit card processors do perform dcc in the backroom similar to these guys in Amsterdam...I would love to see what the sales slip would say when the transaction is processed in person!

And heaven help all of us if these vermin have figured out a way around the regs and can now perform currency conversions without the consent of the cardholder...when visa does it I have agreed with the bank to allow them to do it (it's buried in the agreement)...the merchant also makes certain agreements with credit card processors. I know, for example, in the USA, visa and mastercard do not allow merchants to set minimums for charges and to surcharge credit card payments. Unfortunately these valuable customer protections do not apply in many other countries.

But believe me, I understand exactly what you have said and that you had no control over it.

Oh, and xyz, I think the idea some are giving of being better off paying by cash is considering getting their cash from an ATM if their bank has NO fees or is limited to a simple 1% or less exchange rate. I've been well aware for a long time, that overall I AM better off getting ATM cash and paying in cash than using my Citibank which adds a total of 3%.

Meanwhile, I'm still curious about this comment that the charge slip you sign in Europe must show both a dollar amount (at current exchange rates) as well as the amount being charged in Euro. I really don't recall ever seeing that in the many, many slips I've signed in Europe. Is this new? Meanwhile I suppose that dollar amount shown wouldn't include the 1% from Visa, would it? If not, then again how is that any different from not showing the 3% that ABC agency or whatever adds -- the same as the 1% Visa adds? Technically, those have nothing to do with the "rates" they are currency exhange fees added by Visa or Easy Pay, or whomever.

I suppose in a certain narrow legal sense you might be right but a lot of this, of course, is very very new....I do remember reading on I believe the planet web site how they try to market dcc to merchants and give an example of a sales slip...

I know every time they tried to pull this scam on me in Europe, the sales slip clearly had both a local currench amount and a USD amount which always led me to engage in a pleasant to not so pleasant conversation with a merchant's clerk or a manager.

I would suppose if push comes to shove, we won't really know the answer until enough people make a stink through their banks.