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Hidden charges in credit card transactions

The Straits Times | Saturday, May 17, 2014

I have encountered multiple occasions where, for reasons of cost efficiency or otherwise, certain merchants have chosen to route their Singdollar transactions through overseas organisations.

The unsuspecting customer is not told about this. I found out about it only when I compared my credit card bill with my original bill, and saw that the amount charged to my card was higher.

There is nothing wrong with this practice - as long as the customer is told about it.

In Australia, banks are required to disclose their commissions and fees in all transactions, whether cross-border or not. They cannot "hide" such charges under the total charges.

What banks here are doing may be legal, but certainly not ethical from the customers' point of view, especially when the payment was made in Singdollars and customers were not told that higher charges may be levied.

To be fair, the bank did give me a refund in one case, with another case still pending.

But had I not noticed the discrepancy - $4 in one instance and $87 in another - I would never have realised there were extra charges in the first place.

The onus is on the customer to verify the amounts charged, which the banks can easily waive should you alert them.

Can the Monetary Authority of Singapore comment on why such practices are allowed here?

I urge all consumers to cross-check each entry in their credit card bills to avoid being overcharged.

Letter by Tushar Tarun Bansal

This article was published on May 15 in The Straits Times.

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