If it sounds like a new strain of flu that you need to avoid, you are right on target!
For years, most banks have charged consumers a fee for using their credit cards overseas if the purchases were made in a foreign currency. These fees were almost exclusively associated with an actual trip that (yours truly) participated in – relaxing, having fun, enjoying a vacation in a foreign country, while paying a fee for the conversion of currency and the convenience and safety of using a major credit card rather than carrying cash. In other words, a “semi-justifiable” fee, or at least one that consumers were willing to stomach, possibly due to vacation hangover.
But the latest trend is disturbing, as you don’t even have to leave home to pay a foreign transaction fee. Online shoppers? Beware, shopping online with merchants that aren’t based in the U.S., or booking flights or hotels with international companies may soon result in additional fees of 2% or more.
A reader recently shared this bit of fine print received in the mail from her Bank of America credit card account. Read it and weep:
Amendment to Your Credit Card Agreement:
Effective on June 1, 2009, we are replacing the definition of “Foreign Transactions” in the section of your agreement titled Words Used Often in this Agreement with the following:
“Foreign Transaction” means any transaction made in a foreign currency, and any transaction made in U.S. dollars if the transaction is made or processed outside of the United States. Foreign transactions include, for example, online purchases from foreign merchants.
Apparently, the Credit Card Accountability Responsibility and Disclosure Act of 2009 has a bit of a loophole with some vague language regarding these fees. Combine this with the rising delinquencies, economic crisis and every other bit of bad financial news for banks, it is no surprise that they are seeking every possible avenue to squeeze in other dollar from consumers to offset their losses.
What can you do? Find out the fee policy on your credit cards before traveling outside of the U.S. borders, as well as making any purchases from foreign-based companies. Clearly, the government needs clarification regarding the definition of a “foreign exchange fee” or transaction, or the upshot is that consumers could be paying these fees for a myriad of common purchases that were not subject to these fees in the past.
Readers, has anyone been caught unaware with one of these new fees? Please share your experience if you have by leaving a comment.
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I recently received a foreign transaction fee from BANK OF AMERICA VISA for using LAST MINUTE TRAVEL. As far as I can see Last minute travel is a US company based in the US but for some reason they process their transactions in ISRAEL or at least according to Bank of America they do. So I am forced to pay a 3% fee on this transaction without even a warning.
I was charged this fee twice on Feb – once on pink blossom florist and then again on a unique gifts website.. I shop a lot online, but was never once charged this .. but very disappointed now. I think we may see the resurection of mortar and brick stores and the post office for mailing again
Our law firm is investigating these credit card charges for possible consumer fraud claims that would be brought on a contingency fee basis (i.e., we only get paid if the case succeeds.) We would be interested in speaking with anyone who has incurred one of these outrageous charges. Please do not hesitate to contact us.
Ralph M. Stone
Shalov Stone Bonner & Rocco LLP
485 Seventh Ave., Suite 1000
New York, NY 10018
212.239.4340
lawssb.com
Attorney Advertising. This message may be construed as attorney advertising in some jurisdictions.
I had a 3% “foreign transaction fee” added to my M/C invoice by Last Minute Travel in Altamonte Springs, FL.
I also got a 3% charge on my Last Minute Travel charges. Yikes!
I was charged a 3% “foreign transaction fee” on my Bank of America Visa card for an online purchase of a book from AbeBooks.com through Aliblis. Aliblis has no idea what is going on, AbeBooks says it was Aliblis that did the money transaction and they did not receive anything extra, and Bank of America says it was AbeBooks that charged the fee. According to this site, it seems to be the bank that charged and collected the 3% fee, but their customer service representative did not seem to know what it was when she told me that it was AbeBooks that charged the fee.
I had 3% charged for transaction from Cymax stores which is in Canada – I called Cymax and they graciously offered to refund the $35 – but the winner here is BofA VISA.
I charged two business class tickets in US dollars online with British Air. Mastercard charged me the foreign transaction fee and my bank (USAA) said they’re powerless to help. British Airways said there should be no charge since I paid online in US dollars for travel originating in the US. They tell me it’s a credit card ripoff by Mastercard.
I recently booked a cruise on Celebrity out of Fort Lauderdale through Last Minute Travel and an agency called Tourico Holiday Inc., in Altamonte Springs, Fl 32701.
LMT shows on my mastercard as being an Israeli operation and Mastercard charged me a 3% fee (around 230$), even though I paid for a US cruise in US dollars.
I was furious and talked to the mastercard disputes dept. (877-601-8029). The supervisor there told me they get a lot of these complaints now. He removed the charge for me. Much of it originated because of the rise in use of internet pharmacies in Canada and elsewhere.
I will never deal with Last Minute again and I advise anyone using an online reservation service to specifically ask if they are US-based and whether there are any hidden processing fees.
We are looking into these potential unlawful charges and would be happy to speak to anyone who has received a foreign transaction fee charge.
Please call Jonathan S. Coleman or Aleksas A. Barauskas at the law firm of Johnson, Pope, Bokor, Ruppel & Burns, LLP, 403 E. Madison St., Suite 400, Tampa, FL 33602, toll-free at 1-800-775-0005.
Bank of America Visa charged me a Foreign Transaction Fee for an automatic Skype monthly charge in Dollars. I canceled the card.