Dynamic Currency Conversion (DCC) [2014-2016]
 

As someone who's been unwillingly hit with Dynamic Currency Conversion (DCC), I thought we could get a thread going talking about people's experiences and best practices to avoid getting an unwanted DCC charge when using our cards abroad.

Just to be clear, DCC is not just a scam imposed on Americans by merchants outside the USA; it is international and is spreading like a cancer metastasizing through the travelling world. American merchants pull the same scam with the same lies on visitors to our shores and their credit cards also charge foreign transaction fees on them. When all is said and done, you may be paying up to 8% if victimized by this scam or agreeing with the philosophy that it is a service and good to know the exact value of something in a currency you understand.

Nice summary of dcc above. Just one minor corrction. A foeign transaction fee is imposed by many banks at least in the USA for purchases processed by a processor outside the USA. Thus for example, if you buy Aer Lingus tickets from Orbitz over the internet in a transaction that never leaves the USA, you are still nicked for the foreign transacton fee as Orbitz transmit the charge to Aer Lingus which processes its mc and visa transaction through a processor in Ireland (no surprise there) which means bingo another 3% despite the fact it is a US based transactin all the way.

And just to be clear as noted above, if the merchant refuses to do a charge the proper way with one of the lies they have readilly available, do not offer to pay cash. That is just rewarding them for their illegal attempt to derraud you. Simply cross out the amount in your currency, write dcc refused and initial that. Or if the merchant refuses to accept the charge sans your signature, just cross out the statement agreeing to be scammed and when you get home, dispute the charge. As this is a clear violation of mc/visa procedures the charge should be charged back to the merchant although if it is a small amount the bank may simply absorb the difference which may seem trivial butit's the principle of the matter and the only way to combat this scam.

Finally when checking into a hotel and renting a car outside your naitive land, watch for the scam of them inserting a phrase into what you're signing agreeing to be scammed with dcc. This can be difficult especially when they write this in the local language but it's one of the ways merchants, even some big time merchants such as Avis and Mariot, two companies who I know have pulled these shenanigans, have tried to pull this off.

This thread should be very good to hear the experiences of people being scammed by this monstrosity to help us all learn what we can do to avoid it.

Should this thread also cover DCC at ATMs?

Why not? My most recent usage at a foreign ATM made it sound like the world would end if I didn't accept. It took three prompts to reject it.

The main culprit behind the international growth of DCC are Visa and MC. Both have been pushing merchants to buy into the practice. The argument is that a merchant using DCC is better than a merchant who doesn't accept plastic at all, but it remains entirely dishonest.

Some cities/countries are worse than others. I lived in Italy and rarely saw DCC used (with the exception of hotels, which often ask... I'm looking at you, Westin Excelsior). A week in Dublin, though, was DCC central. Nearly every merchant, except Trinity's bookstore, tried to get me to use it. A coffee shop didn't give me a choice and a call to Chase got the difference refunded. I quickly learned to say "charge me in euros" as I would hand over my credit card.

Great start to the DCC thread! ^

I'm not sure mc/visa had much choice in this. After all, they make substantial income on the 1% they charge for currency exchange transaction and I believe it's 0.8% or something for allowing acces to the international interchange system even if no currency exchange is involve.d. It is or seems to be waiving of these fees is hardly ever done outside the USA and in the USA some do waive these fees, some pass along the fees and some of the near criminal banks impose an additional fee to bring it up to 3%.

But in any event, somewhere in the back of my warped mind there seems to have been some kind of agreement somewhere prohibiting mc/visa from prohibiting dcc as I remember. Now why it wouldn't apply to Amex I can't answer (although most of the Amex cards have foreign exchange fees). As far as discover, they really don't have all that much of an international presence. I hear China all the time and that may be true but very few places in Europe, for example, still take Dincers Club where supposedly Discover is interchangeable with. And aren't North American diners club cards processed through the mastercard system? So I don't think mc/visa are the culprits here.

In China Discover is processed through UnionPay and is probably more widely accepted. Similar to how it is processed through JCB in Japan. I have no idea what that means for DCC however.

Noted and logged. But I've read all sorts of threads where in China, dcc is very much practiced. So if using Discover in China, is one subjected to this scam?

Oops, you posted before before I hit submit on my edit. I have no idea.

Based on a quick Google, it appears DCC is allowed. Discover specifically warns to look for it in general.

I understand that it’s more than US cardholders traveling overseas, and that it has happened to people all over the world, including others getting hit with DCC from merchants in the US. I will correct the wiki in a bit to reflect what you said, and you can feel free to edit it too. That’s the benefit of a wiki!

Yep, I figured we could have a comprehensive thread on DCC, including both purchases at the point of sale as well as ATMs. This way we can share information, best practices, and ways to look out for the tricks that merchants and ATM operators are now trying to pull.

Thanks! I aspire to be as great as your EMV thread. :D

I didn't see this covered, so I guess I'll ask here. If one has an EMV chip and pin card, is it possible to always avoid DCC by not entering his/her pin number until they can confirm they'll be billed in the local currency?

I will answer with a definite maybe. All I can tell you that when checking into my hotel in London last year with a chip and signature card, the clerk handed me the pin pad and the first thing it asked is which currency I wished to pay in, sterling or US dollars. I assume that's the first thing that happens in a chip and pin transaction. However, it is possible for certain dishonest merchants to push the "your currency" button before handing you the pin pad. So the answer is a definite maybe.

It also won't help for transactions that don't require a verification method. For instance, many times under $25, $50, or even $100 now at some merchants in the US you don't need to sign for a receipt. If the point-of-sale terminal defaults to your card's denominated currency and the transaction completes without your interaction, you can get DCC without any authorization from you.

Don't Visa/MC require explicit authorization from the terminal?