More than eight in 10 (83%) UK consumers feel "tricked" and even "taken advantage of" by banks allegedly charging hidden fees in foreign exchange, according to research published today.
Some 85% of consumers underestimate or do not know the true cost of sending money abroad, according to the study, carried out for TransferWise, an international money transfer platform.
Of those surveyed, 86% believe the Government should take an active role in preventing alleged misleading pricing by the financial services sector.
Taavet Hinrikus, co-founder of TransferWise, said: "It's deeply unfair for banks to advertise foreign exchange as free to consumers when in fact they just hide their fee in the mark-up they add to the exchange rate.
"Customers just want to know what they're getting - surely that's not too much to ask? That's why we are asking the Government to deliver on its pledge to stop misleading pricing in foreign exchange before 2016."
The research findings included:
:: 83% of people felt it would be unfair if their bank did not inform them of all the costs involved to use one of their financial services
:: Nearly a quarter (23%) of people were angry about allegedly being charged hidden fees by their banks
:: Two-thirds (66%) said they would feel happy or delighted if they could avoid hidden costs when sending money abroad while another 43% would be relieved or grateful.
TransferWise says that even when advertised as free, there is a fee hidden within the exchange rate the banks offer: what consumers receive is an unfavourable exchange rate, usually around 3% - 5% over the real exchange rate - the midmarket exchange rate.
In November 2014 TransferWise called on the British Government to stop alleged misleading pricing in foreign exchange.
It says that in April the Conservative Party pledged it would increase and improve banking competition by requiring transparency on charges.
This included ensuring all foreign exchange transactions include a clear breakdown of the cost of the service alongside a publication of the mid-market rate and the offered rate. This should be available before a transaction is made and communicated in a way that can be understood by the average consumer.
:: The survey was carried out by Opinium Research on behalf of TransferWise on 2,000 nationally representative UK adults aged 18 or older earlier this month.
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