New ATM scam stealing hundreds of dollars from unsuspecting tourists

New ATM scam stealing hundreds of dollars from unsuspecting tourists

Using an ATM abroad is not like withdrawing from an ATM at home. If you rush to agree to the terms without paying close attention, you could end up losing hundreds of dollars in unnecessary conversion fees.

I wish I had warned my brother about this when he visited me in Athens this summer. As we were exploring the historic Plaka district on a hot afternoon, he excused himself to withdraw money from an ATM. A few minutes later he came back with 1,000 euros. The cost: $1,219.

I told him that couldn’t be true. But his receipt from a company called Euronet showed the breakdown: a transaction fee of €3.95, an exchange rate of €0.82 to the dollar and a premium of 13 percent from the current exchange rate.

I asked him if the ATM disclosed these expenses during the transaction.

“I saw the fee of 3.95 euros,” he said. “But I didn’t notice the exchange rate and the premium.”

Many customers also overlook unfavorable exchange rates, which benefit some businesses.

“It’s one of the hidden ATM costs,” said Arun Tharmarajah, head of European banking and expansion at Wise, a financial technology company specializing in online money transfers. “Customers don’t know about it.”

So why am I upset about these high ATM costs? Because I knew about them and I should have said something.

I regularly hear from readers reporting fees and surcharges that make the exchange rate from ATMs in Greece almost look like a bargain. And in 2020, while living in Lisbon, I came across an expensive ATM operated by Euronet.

I had spent my last euro on a loaf of fresh Pão de Centeio at a local bakery, paid for in cash only. I spotted an ATM across the street. I was relieved when it accepted my card, but that feeling quickly gave way to dismay. The exchange rate looked. Instead of my US dollar being worth 0.90 euros, it only gave me 0.80.

Then I checked the numbers: The machine charged a fee of $4 plus 12 percent surcharge—shown in small print on the screen—for exchanging my dollars.

According to the company, Euronet Worldwide operates a network of more than 50,000 ATMs in 63 countries.

Stephanie Taylor, a spokeswoman for Euronet Worldwide, said all fees are “clear, transparent and prominently visible” before each transaction. “The customer can unsubscribe from the transaction at any time free of charge,” she said in an email.

She said Euronet strives to offer convenient cash to people around the world, but there is a cost associated with providing that service “which we believe is fair and reasonable”.

Simone Semprini, who lives in Lisbon and is the CEO of TourScanner, a tours and activities comparison site, says high ATM fees are a big problem for his customers.

“In recent years we’ve seen the rise of ATMs that charge huge commissions,” he said.

The ATMs make themselves popular with locals in two ways. First, by generously rewarding shopkeepers who host them (merchants have told Semprini they get up to $1,000 a month to run an ATM at their location). Also, customers with a bank account in the ATM’s home country can withdraw with lower fees.

Greg Grobmyer, a dentist from Chattanooga, Tennessee, says he was stunned when he returned from a trip to Poland and found $100 in commissions and fees on his credit card bill. He found an ATM in Kraków after paying a hotel bill. Although the exchange rate wasn’t looking good, he didn’t run the numbers before accepting his withdrawal.

“It’s troubling to see these not-so-small commissions reaching hundreds of dollars,” he said in an email. “Especially if you can avoid them.”

So how do you avoid high ATM fees? Preparation is key.

Call your bank before you leave the country to find out what fees are charged for off-network ATMs for international transactions. Some banks will waive the fee or give you a credit upon your return to the United States.

Michael Foguth, founder of Foguth Financial Group in Brighton, Michigan, recommends calling your bank before you travel to order some currency for the country you’re traveling to. He says it might be cheaper but not free. It requires an in-person visit, and your bank may also offer a less favorable exchange rate when you buy foreign currency.

There are workarounds once you are on site. Mine was to go to an ATM which might give you a better exchange rate. Not a perfect solution: in the middle of the transaction, the machine asked if I wanted to do the transaction in dollars or euros. As with credit cards, it is best to transact in local currency and let your bank do the conversion.

Another solution: use a multi-currency debit card to reduce your exchange costs. The financial services app Revolut, for example, exchanges your money at the best interbank rate (that’s the rate that banks charge each other to exchange money).

For off-network ATM transactions, Revolut does not charge a fee for withdrawals up to US$1,200 (or local currency equivalent) per month. After that, a fee of 2 percent of the value of an ATM withdrawal is charged.

Another popular app, Wise, also uses the real exchange rate and fees on a sliding scale. Converting $1,000 to euros costs about $4. ATMs are free for the first $250 in a month, and there’s a 2 percent fee for anything beyond that.

Andy Abramson, who runs a communications consultancy in Las Vegas, has used both services and says he prefers them to traditional banking transactions.

“I load them with money and then use them when I travel,” Abramson said. “I can add funds as needed in seconds and spend in local currency on the spot with no fees.”

The Washington Post

Also see: Don’t fall for this increasingly common overseas rip-off

Also see: Do you still need to use cash when traveling abroad?

#ATM #scam #stealing #hundreds #dollars #unsuspecting #tourists

Leave a Comment

Your email address will not be published. Required fields are marked *