30 Jul Foreign currency exchange scams you need to know

Just like holidays insurance, travel money is one of those pre-trip essentials you need to plan. These days it’s common knowledge that currency exchanges in airports or other international departure points are a rip-off, when compared to the average rate you can get on the high street. But whilst you can often get the best rates by exchanging currency before you set off for the airport, there are going to be some instances where this just isn’t possible, such as when you’re travelling to an exotic destination whose currency isn’t stocked by your local Post Office (as has happened to us many times!)

When faced with this problem, our first piece of advice would be to order the currency a few weeks before you leave the UK, as most currency exchanges can source even the most unusual currencies with enough notice. But if you’re planning on visiting multiple countries or backpacking for a while, then it’s obviously not practical to carry around a huge wad of cash for every country you’re going to visit. So at some point you’re going to need to use a currency exchange whilst abroad.

Whilst as a rule of thumb you should always try and use official looking currency exchanges, there will no doubt be some instances where less official means of exchange will have to be used, such as when crossing land borders in South America and Southeast Asia. This is when your chances of being scammed will be much greater. So to avoid falling into this trap, here are the most common scams to look out for.

Sleight of hand

This scam can happen anywhere, be it an upmarket looking currency exchange or somewhere less salubrious. The transaction proceeds as normal and the cashier will count out the notes in front of you and ask you to confirm that you’re happy with everything. The scam then occurs once the money has been counted; the cashier or someone else will distract you for a couple of seconds so a few notes can be removed from the pile without you noticing. This scam is particularly common in Indonesia. Stay alert at all times and pocket the money as soon as you’ve confirmed it’s the correct amount.

Folded notes

This unfolds (no pun intended!) in a similar way to the above, the money will be counted in front of you and everything will appear correct. However only one corner of each note will be raised and counted, rather than each note being placed down onto a pile in front of you. With this scam some of the notes have been folded in half, so the cashier can count these twice. You only notice the scam once you count the money yourself, which is usually after you’ve left the currency exchange, as the money is often sealed in an envelope by the cashier before it’s handed over. If a currency exchange counts money using this method, recount each individual note yourself, before agreeing to the transaction.

The dodgy calculator

With this scam, the exchange rate that’s advertised is always competitive, in order to lure you in. The cashier will use a calculator to calculate the exchange and will often show you the figures they’re inputting, to demonstrate it’s the correct rate being used. However the scam here is with the actual calculator, which has been manipulated in order to give the currency exchange a favourable rate, often by skimming 5% off the total. This scam is often found in Southeast Asia and South America. To avoid this scam, use your phone to calculate the correct total and check this amount matches what’s being offered by the currency exchange.

Fake currency

Some money exchangers, typically unofficial street vendors, will try and pass off counterfeit currency, safe in the knowledge that many tourists will not be able to spot the difference between a forgery and the real McCoy. The best way to avoid this scam is to never use street vendors to exchange currency if there are other more official looking exchanges available.

Derisory exchange rates

This one isn’t a scam as such, but it is a crappy deal for travellers. If you find yourself travelling somewhere without any currency, avoid the temptation to exchange a large quantity of cash at the departure or arrival airport. If need be, exchange a small quantity of cash at the airport, to cover food, taxis and other necessary expenses, then when you get to your destination, find a reputable currency exchange who will almost certainly have better rates than at the airport.

Here at Coverontrip holidays insurance, we think one of the best ways of ensuring you get the highest possible exchange rate on your foreign currency is to plan in advance. Great deals are available if you order online and get your currency delivered or arrange an in-store pickup. Pre-paid currency cards can also be a great option, if you don’t want to carry large amounts of cash on you, but be sure to research and shop around for the best deal. Just as with buying holidays insurance, it really does pay to do a bit of research to find the best deal. Speaking of which if you have a holiday coming up, get a holidays insurance quote from Coverontrip today.