Bank Exchange Rate Rip-Off

[Chenz]

I have recently purchased a house in New Zealand - yeah, OK let's leave the Kiwi jokes out of this for now. I get instructions from my NZ solicitor that the deal is going ahead so head down to my bank to transfer the funds from Aus to NZ. This therefore requires an international transfer based on the applicable exchange rate for that day. We are talking of a figure around $600,000 NZD

The very kind woman at the bank puts the information into the computer and tells me the amount I need to transfer in AUD. I had checked the exchange rate before going and the figure they had on the screen was nowhere near that. I then questioned her and showed her the Reserve Bank rate on my phone. She says that is not the bank rate. I then remonstrate a bit more and ask her to check with someone higher. A phone call later and they say they can "do a little bit better". This equates to $14,000 AUD!!!!!!

My beef is that if I had not made a bit of a song and dance they would have happily pocketed $14,000. I am tempted to report this to the banking Ombudsman as it seems like a blatant rip-off.

The house is in Rotorua and I am going to put it up for a Bookabach (NZ AirBnB). Happy for AULRO members to use when in Rotorua.

[Gordie]

In the future use OzForex or OFX I think they call themselves now. They give a much better rate than banks, and the deal price is locked in when you accept it. I have used them for a long while now. They will also negotiate better deals for larger amounts.

[101RRS]

Sorry not sure what the real issue is - yes the Reserve Bank rate is the official rate but that is not the buy and sell rate that is actually used - effectively what the bank is giving you is the exchange rate less their commission - $14,000 on $600,000 is about 2.5% - that would seem about right.

Same process applies if buying a $100 item in USD and you are paying in AUD.

Really the cost of doing business. No point in complaining to the ombudsman as it would seem to be inline with current rules.

Rather than doing an electronic tranfer of aussie to kiwi - maybe shop around the currency dealers/other banks and see if you can get a better deal and deposit the kiwi dollars you get straight into the kiwi account.

[rangieman]

Sorry not sure what the real issue is - yes the Reserve Bank rate is the official rate but that is not the buy and sell rate that is actually used - effectively what the bank is giving you is the exchange rate less their commission - $14,000 on $600,000 is about 2.5% - that would seem about right.

Same process applies if buying a $100 item in USD and you are paying in AUD.

Really the cost of doing business. No point in complaining to the ombudsman as it would seem to be inline with current rules.

Rather than doing an electronic tranfer of aussie to kiwi - maybe shop around the currency dealers/other banks and see if you can get a better deal and deposit the kiwi dollars you get straight into the kiwi account.
Man That BS from the capital has escaped , I thought it was caught with in the walls of Parliament House .
What you dont see a problem that they can knock $14,000 off with out a hoot and still make a nice profit:bat:
Nah this is a lesson for new players for sure good on you for getting into them , At least you saved a bit of doh from them lying cheating rip off merchants[bigwhistle]

[Disco-tastic]

Sorry not sure what the real issue is - yes the Reserve Bank rate is the official rate but that is not the buy and sell rate that is actually used - effectively what the bank is giving you is the exchange rate less their commission - $14,000 on $600,000 is about 2.5% - that would seem about right.

Same process applies if buying a $100 item in USD and you are paying in AUD.

Really the cost of doing business. No point in complaining to the ombudsman as it would seem to be inline with current rules.

Rather than doing an electronic tranfer of aussie to kiwi - maybe shop around the currency dealers/other banks and see if you can get a better deal and deposit the kiwi dollars you get straight into the kiwi account.I think he means they knocked $14000 off the total amount and they still charged at a higher rate than the official reserve exchange rate.

[Gordie]

When other foreign exchange agencies can do much better on the deal than the banks...and obviously still make money...it would appear that the banks are making quite a nice little sum. One just needs to shop around. Not hard to do.

[87County]

One way around it all is to have/open your own account in the other country and transfer your own money into it which can then be used for the payment.

An international transfer of your own money then occurs at the ruling interbank rate - no commission is charged, because it is your own money :)

[Old Farang]

One way around it all is to have/open your own account in the other country and transfer your own money into it which can then be used for the payment.

An international transfer of your own money then occurs at the ruling interbank rate - no commission is charged, because it is your own money :)
Yes, this is the way that I do it to Thailand. Always get a better rate by the bank in Thailand and the NAB in Oz just charge a $30 TT fee. Last year the branch that did it changed the written instructions without telling my mates wife that does it for me. After getting fobbed off by the then manager at the branch in Oz, I took it up with NAB and they credited me $400 because of the stuff up. And the manager suddenly "resigned"!

[gazk]

In the future use OzForex or OFX I think they call themselves now. They give a much better rate than banks, and the deal price is locked in when you accept it. I have used them for a long while now. They will also negotiate better deals for larger amounts.

X2 I used OZFOREX a few years ago on a regular basis for transfers to Canada.

[Chenz]

The mortgage was with the bank in question and transferring to our bank of the same name in NZ so made sense to use them.

My beef was that if they could knock off the $14,000 why not do this automatically instead of me having to ask????????

[towe0609]

For my recent Europe trip, for all the big $ bills, I got their bank account details and used TorFX to do direct deposits to their account in EUROs or whatever the local currency was.

The banks rates are a scam ... pays to shop around. I'm not surprised by your $14k saving. I'd be interested to see what rate you got compared with a broker like TorFX.

[DiscoMick]

Bit like the Brit's who used to get up to 1.4 Euros for their pound, but since Brexit now get as little as 0.8, I read.