Originally Posted by imverge
but if you are booking on the Starwood website and are quoted a rate in USD then they have a responsibility to ensure that the rate is indeed USD if not then it should be in local currency
Actually, the issue you had described is different than the one raised by the OP:
In certain countries with less than stable currencies, e.g. Russia, Brazil, the rates are often quoted in a more stable currency, e.g. USD (otherwise, depending on the currency in question, the rates would need to be updated as often as daily). However, it would be illegal for the hotel to charge the guest in a currency other than the national currency even if they wanted to. Most hotels take advantage of this and use an inflated exchange rate to convert from USD to the local currency.
If you read the rate rules carefully, you will often notice a statement such as "rates shown in USD, guest will be billed in _____ (local currency) at the hotel's rate".
Again, not a fraudulent, but an unethical practice...