Why wasn't I told of change?

ERIC HALL recently returned from a holiday in Canada visiting his daughter. Like the majority of holidaymakers, he spent more than he expected.

But it was not his over-indulgence that bumped up the bill. His bank, National Westminster, changed the rate of exchange on the items he spent on his Visa card without his knowledge.

Mr Hall regularly uses his Visa card abroad. He said: 'Some years ago I was advised by NatWest that the cheapest and most secure way to make purchases abroad was by credit card. The conversion of the currency has been at the commercial rate of exchange.'

This year he was in Canada for a month, returning on 15 June. After he got back he received his Visa card statement and an accompanying leaflet.

NatWest had changed the basis on which foreign transactions were calculated. The leaflet said the rate was now the commercial rate less 'about 2.75 per cent'.

Mr Hall says: 'As my statement, which arrived with the leaflet, included more than pounds 900 of travel expenses I was not amused. The result of the bank's new calculation is that I was charged at least pounds 24.79 more.'

He wrote a letter of complaint. NatWest replied that the new rates of exchange, 'while generally 2.75 per cent less favourable than commercial rates, are the rates of the day determined by the bank and remain consistent with Clause 4 of the terms and conditions. For this reason it was not necessary to advise customers.'

NatWest was using a typical bank excuse - the small print allowed them to alter the rate with no obligation to tell anyone. Mr Hall was far from satisfied.

We asked NatWest why and when the rate was changed. A spokesman said the reason for the change was to bring the bank in line with 'known competitors' and for 'business reasons'. The rate was changed in March.

But the first Mr Hall and the majority of other NatWest credit cardholders knew of the change was in June, three months later, when they received the leaflet.

The spokesman added: 'An insert was put with all June statements to coincide with the peak holiday season. Although not legally obliged to do this, we endeavoured to inform our customers of the change in calculation of the interest rate applied.'

He admitted: 'Perhaps we could have advised customers a bit earlier.' But he did not think this case suitable for compensation.

Banks seem intent on shooting themselves in the foot when it comes to keeping their customers informed.

The conversion rate for Lloyds Bank credit card customers is the wholesale rate of exchange applied by Mastercard adjusted by a percentage set by Lloyds. The current adjustment is 2 per cent less than wholesale rate.

A spokesman for Lloyds admitted that it was 'not explained as clearly as this in the current terms and conditions' and added: 'We will be writing more clearly to customers in the autumn.'

If you use your Barclaycard abroad, items will be converted into sterling at 2 to 3 per cent less than the commercial rates.

Holders will find the relevant information in the Barclaycard magazine - if they have not thrown it in the rubbish with all the other magazines and leaflets sent by the financial institutions.

The rate of exchange for Midland Bank credit cardholders is 2 per cent less than commercial rates. This rate has been charged for 'quite a long time'.

Cardholders are told of the conversion rate on the reverse of the credit card statements.