I’ve written extensively about Dyanmic Currency Conversion (DCC) on this site, and even got a feature in the Straits Times about it. To reiterate: DCC is a shameful, money grabbing practice which adds no value whatsoever to the consumer and only exists to inflate merchant margins at the expense of unaware customers.
I’ve disputed many DCC transactions before, some successfully, others less so, but I wanted to given an account of a recent transaction that was DCC-ed without my consent and my subsequent dispute with UOB to illustrate exactly how the deck is stacked against consumers.
How it happened
Here’s the backstory: on my current RTW trip I visited Jordan. Jordan requires a visa for Singapore passport holders, but it’s issued on arrival and entirely done and paid for at the immigration counter. The visa costs JD40.
At the immigration counter you don’t say anything. You look in the camera when asked. You give your fingerprints if needed. You tell the official your purpose of visit. And you give him your credit card to pay the visa fee. At no point are you asked what currency you want to pay in. The immigration official autopilots through the entire process.
Naturally, this happened:
My JD40 transaction was DCC-ed, without my consent, to S$79.82. The biggest insult of all? Check out the wording at the bottom. In case you can’t see it clearly, it says this:
“I’ve been given a choice to pay in currency different from my local currency, I accept this choice, I’ve chosen not to use the Mastercard currency conversion process and I’ll have no recourse against Mastercard concerning the currency conversion or its disclosure”
There is so much brazenly wrong about this statement that it’s almost comical, if it weren’t such an outrage. There’s the obvious legal issue of the total lack of consent from the cardholder, and I’m no lawyer (those of you who are should weigh in), but can you really impute consent and unilaterally bind the cardholder like this?
Once you’ve gone past immigration you can’t turn back and go to the same official to ask him/her to re-do the transaction. And even if you could, even if you spotted the DCC the minute it happened, would anyone here honestly risk getting into trouble for arguing with an immigration official who might not even understand what DCC is?
To add insult to injury, DCC-ed transactions are subject to a further bank fee. Remember the SGD amount quoted in the receipt of S$79.82?
Here’s how it appeared when it posted:
Yup. My S$79.82 amount became S$80.62. XE Currency tells me that a 40 JD transaction should be about S$74.72. Obviously you won’t get that rate if you were to use the bank’s currency conversion, but I guarantee you that you wouldn’t be paying S$80.62 either.
Disputing the charge
I decided to dispute this with UOB, but the problem is that DCC-ed transactions will invariably descend into a he-said-she-said situation. I called up UOB once the transaction posted, and thus began one of the most frustrating conversations of my life.
After explaining to the CSO what had happened I was placed on hold for a while. Then-
“Sir, have you contacted the merchant to ask them to amend the transaction?”
Now, this is a typical first step that banks take which I think makes no sense at all because it puts all the burden on the shoulders of the customer. Presumably, if a DCC-ed transaction happened, it’s more likely than not because the customer was DCC-ed against his or her will. In that case, how will calling the merchant resolve the matter? Moreover, in the context of a visa payment fee, who exactly would you contact? So it annoys me when banks suggest this because it’s like shrugging off responsibility.
“Well, like I mentioned, this transaction took place at the immigration checkpoint so there isn’t any customer service hotline I can contact”
I was put on hold.
“Sir, if you have a written document or proof that this transaction was supposed to be charged in Jordanian currency but then ended up being charged in Singapore dollars then we can file a dispute.”
This made no sense at all. I mean, how would that even work?
“But that doesn’t make sense. Regardless of what transaction this was, be it in a restaurant, a store, whatever, you don’t get a document from the merchant saying “ok, we will bill you in local currency”. This isn’t how transactions work. Your currency choice is indicated at the time of payment. That’s it. What you’re asking for does not exist.”
I was put on hold again
“Sir, I’m very sorry to inform you that without a document we cannot open a dispute”
“But I’ve explained to you already, this document you’re asking for does not exist. In the context of a retail transaction there’s no such thing as what you’re describing. Think about it- if you were buying something in a department store do you first get a written agreement from the merchant that they’ll bill you in local currency?”
I was put on hold again.
“Sir, do you have any voice or video recording to prove you asked for this transaction to be done in Jordanian currency?”
I don’t know what UOB is suggesting, but surely videotaping immigration officials won’t end well for you.
“No, because you can’t exactly videotape immigration officials without being arrested. I don’t think you fully understand the context of this transaction- it’s at the immigration checkpoint, where you can’t videotape.”
I was put on hold.
“I’m sorry sir, without any documentary proof we cannot open a dispute”
This clearly wasn’t going anywhere.
“That is not acceptable. Would you please let me speak to the manager?”
“We have spoken with the manager, he will tell you the same thing.”
This went back and forth for a while, the CSO unwilling to put me through to a manager and me insisting that I’d like to speak with one. Long story short, a callback has been arranged where I’m quite certain I will tell the same story and quite certain I will get the same response.
Why am I fighting this?
I’m quite certain I won’t be successful in this instance. So why am I fighting this? It’s the principle of the matter more than anything else.
This whole situation is wrong for two reasons. The first has to do with the whole unethical way in which DCC is carried out. I’ve said enough about that and won’t go over it again. But the second is equally appalling to me: why are banks so unwilling to help their customers out when it comes to something like this?
UOB was more than happy to earn merchant fees from the thousands and thousands I’ve passed through their cards over the years. And yet, when it comes to a small difference of a few dollars, they’re doing everything in their power to tell me their hands are tied.
I mentioned that the deck is stacked against consumers, and that really came out in this conversation:
- UOB asked me to contact the merchant directly to resolve the matter
- Leaving aside the fact that most DCC disputes arise because the consumer was DCC-ed against his/her will and therefore contacting the merchant won’t fix anything, it’s not always clear who to contact.
- UOB requested that I submit documentary proof that the transaction was supposed to be charged in local currency
- Such proof simply doesn’t exist, regardless of what type of retail transaction you’re talking about. And if you paused to think about any transaction you ever don, you’d realise that’s not how things work
- UOB suggested I should have taken a video or audio recording of the incident
- Let’s leave aside the fact that this wouldn’t be possible in my situation, but even if it were, say in a shop or restaurant, is that really what it’s come to? Recording a situation has the tendency to escalate it, which in a worst case scenario could lead to harm to the customer. And it wouldn’t be necessary if UOB were simply willing to take the side of its customers.
At the heart of it this is a question of trust. UOB is saying “despite the fact you’ve banked with me for however many years, I will not take your side because I can’t trust that you’re reporting things truthfully. Even though this is a few dollars and it’d be absurd to think of anyone who could scam the bank out of money by making and disputing DCC-ed charges”
And that, to me, is not doing Right By You.
Final point: although this particular transaction involved UOB, the experience I have had is by no means exclusive to them. I’ve had similar frustrating conversations with DBS, Citibank etc where the consumer has to jump through hoops when they’re the victims.
I do not know what it will take to get consumer watchdogs and banking regulators to crack down on DCC and create proper consumer protections. But I do know that if we don’t speak up, the situation won’t improve. I know the experience I encountered is not atypical- I’m sure that many, many of you will have gone through similar frustrating conversations with banks when trying to dispute transactions that were DCC-ed against your will (and please share your stories, it’ll be cathartic if nothing else).