Beware the currency-conversion trap

Unwary online shoppers who pay for goods by credit card could face unexpected charges because of the way in which some large retailers have built their websites. Leading international companies such as Kodak have set up sites that are based overseas, landing customers with foreign- currency transaction charges even though they are buying in sterling from the UK.

One credit-card customer has been hit by the charges three times in the past six months after buying goods online. In the most recent case, the shopper bought goods from Kodak, whose website is based in Switzerland. "I have been charged a currency-conversion fee even though I was paying in pounds," he said. "Nowhere at Kodak's check-out stage was I told that a currency conversion was involved."

However, the terms and conditions on Kodak's site do warn: "Kodak Online Shop is a Swiss company ... any sale will therefore constitute an international transaction and as a consequence please note that your bank or credit-card company may levy a charge for pro- cessing such a payment."

Ian Barber, of Barclaycard, Britain's biggest credit-card lender, said that this was a trap that could catch out many shoppers, because some retailers present transactions to UK customers in sterling, even though the underlying charge is actually in a foreign currency.

"Mastercard views such transactions as overseas transactions so it passes the charge on to us with the currency conversion loading already added," he said.

"We're going to review the terms and conditions of our cards to try to make this clear to customers in the future."

Barber said Visa cards were not affected by the loophole.