How to Avoid Currency Exchange Scams While Travelling

Travelling abroad is an adventure filled with new sights, sounds, and experiences, but it also can come with financial pitfalls, particularly when exchanging currency in another country. Falling victim to a currency exchange scam can turn a dream trip into a costly nightmare, draining your travel budget and leaving you stranded. 

For UK travellers, ensuring your pounds are exchanged safely is crucial to enjoying a stress-free journey. In this post we’ll look into some of the most common currency exchange scams, practical steps to avoid them, and strategies to protect your money.

Understanding Currency Exchange Scams

Currency exchange scams exploit travellers’ unfamiliarity with foreign currencies, local exchange practices, or the urgency of needing cash abroad. These scams often target tourists in busy airports, tourist hotspots, or unregulated exchange booths. Scammers rely on distraction, misinformation, or outright deception to shortchange you. Recognising the tactics they use is the first step to staying safe.

Some scams are blatant, like handing over counterfeit notes or quoting an attractive rate only to apply hidden fees. Others are more subtle, such as manipulating exchange rate displays or pressuring you into quick transactions. According to a 2023 report by the UK’s Financial Conduct Authority, travelers reported losses of over £10 million annually to exchange-related fraud, with tourists being prime targets. Understanding these risks empowers you to make informed decisions.

Common Currency Exchange Scams to Watch For

1. Fake Exchange Booths In popular tourist destinations like Bangkok or Istanbul, unofficial exchange booths may mimic legitimate ones. These setups often display enticing rates to lure you in but deliver counterfeit currency or fewer notes than promised. For example, a traveler in Prague reported exchanging £200 for Czech koruna, only to receive outdated notes no longer in circulation. Always check for official licensing or signage, and stick to reputable providers.
2. Dynamic Currency Conversion (DCC) DCC occurs when a merchant or ATM offers to convert your purchase or withdrawal into pounds at the point of sale. The catch? The exchange rate is often inflated, and hidden fees can add 5-10% to the cost. A 2024 study by Which? found that UK travelers lost £300 million annually to DCC at ATMs and shops abroad. Always choose to pay or withdraw in the local currency to avoid this trap.
3. Sleight-of-Hand Tricks At busy exchange counters, scammers may count your cash slowly, “accidentally” dropping notes or slipping in lower denominations. In a rushed moment, you might not notice you’ve received €400 instead of €500. This tactic is common in markets or crowded tourist areas. Count your money carefully before leaving the counter, and don’t let distractions rush you.
4. “No Commission” Traps Booths advertising “zero commission” often compensate by offering poor exchange rates. For instance, an airport kiosk might claim no fees but give you $1.10 per pound instead of the mid-market rate of $1.30. This subtle scam can cost you £50 or more on a £500 exchange. Always compare the offered rate to the current mid-market rate.
5. Street Money Changers In some countries, individuals approach tourists offering to exchange money at “better” rates. These deals are almost always scams, delivering counterfeit cash or shortchanging you. A UK traveler in Morocco reported losing £150 to a street changer who handed over fake dirhams. Stick to regulated providers to avoid this risk.
6. ATM Skimming While not strictly an exchange scam, ATMs rigged with skimming devices can compromise your card details, leading to unauthorized withdrawals. This is prevalent in tourist-heavy areas. Inspect ATMs for tampering, cover the keypad when entering your PIN, and use machines inside banks when possible.

Practical Steps to Avoid Currency Exchange Scams

Protecting your travel money requires preparation, vigilance, and smart choices. Here’s how to stay safe:

1. Research Exchange Rates Before You Go Before traveling, check the mid-market exchange rate for your destination’s currency using reliable sources like XE.com or Google Finance. This gives you a benchmark to spot unfair rates. For example, if the GBP to USD rate is 1.30, avoid booths offering 1.15 or less. Knowing the rate also helps you negotiate or walk away from bad deals.
2. Use Reputable Exchange Services in the UK Opt for trusted providers like Travel Cash. We offer competitive rates, transparent fees, and secure delivery, ensuring you get the correct amount of foreign currency without surprises, all before you leave the country. Pre-ordering your money online before departure eliminates the need to risk dodgy airport kiosks or street vendors.
3. Avoid Airport and Hotel Exchanges Airport and hotel exchange booths are convenient but often charge high fees or offer poor rates. A 2024 survey by MoneySavingExpert found that airport exchanges in the UK charged up to 15% more than high-street providers. 
4. Count Your Money Carefully When exchanging cash, count the notes in front of the cashier before leaving the counter. If possible, bring a friend to double-check or record the transaction discreetly. If you suspect shortchanging, address it immediately. Reputable providers, like those regulated by the FCA, are less likely to engage in such tactics.
5. Decline Dynamic Currency Conversion When using your card abroad, always select the local currency option at ATMs or payment terminals. This ensures your bank’s exchange rate applies, which is typically going to be better than the merchant’s. Check your receipt to confirm the currency, and dispute any charges if DCC was applied without consent.
6. Inspect ATMs and Use Secure Locations Before using an ATM, check for loose card slots or suspicious devices. Tug gently on the card reader to ensure it’s secure. ATMs inside banks or reputable businesses are safer than standalone machines in tourist areas. If possible, use contactless payments or prepaid travel cards to reduce ATM reliance.
7. Carry a Mix of Payment Methods, or At Least Split Cash Up Relying solely on cash increases your risk of scams. Carry a mix of cash, a debit card, and a credit card for flexibility. Prepaid travel cards, like those offered by Wise or Revolut, allow you to load multiple currencies and lock in rates, reducing the need for frequent exchanges. If you do prefer to stick to cash, split it into several secure places in your accommodation and never carry it all at once!
8. Stay Alert in Tourist Hotspots Scammers thrive in crowded areas like markets, train stations, or landmarks. Be cautious when approached by strangers offering exchange deals, and avoid discussing your finances openly. If you need to exchange money, find a quiet, reputable location to focus on the transaction.
9. Keep Records of Transactions Save receipts from currency exchanges to track rates and amounts. If you suspect a scam, these records can help you file a complaint with the provider or local authorities. 

Why Pre-Ordering Currency is a Safe Bet

One of the most effective ways to avoid scams is to plan ahead and order your travel money from a trusted provider like TravelCash.co.uk. Pre-ordering offers several advantages:

• Transparency: You see the exact exchange rate and fees upfront, with no hidden costs. TravelCash displays competitive rates aligned with market trends, ensuring you get more foreign currency for your pounds.
• Security: Home delivery or click-and-collect options mean you avoid risky exchanges abroad. Your money is insured during transit, and you can track your order.
• Convenience: Order online in minutes, with delivery to your door or a pickup point. This eliminates the need to hunt for trustworthy booths in unfamiliar places.
• Reliability: TravelCash is regulated and customer-focused, reducing the risk of fraud. 

For example, a UK traveler planning a trip to Japan ordering yen through TravelCash would receive ¥20,000 more than at an airport kiosk for a £500 exchange, based on typical rate differences. This not only saves money but also ensures you’re carrying legitimate currency from day one.

What to Do If You’re Scammed

Despite precautions, scams can happen. If you suspect you’ve been shortchanged or given counterfeit money, act quickly:

1. Contact the Exchange Provider: If you used a booth, return immediately with your receipt and calmly explain the issue. Reputable providers may correct mistakes to maintain their reputation.
2. Report to Local Authorities: File a police report, especially for counterfeit currency or significant losses. In the EU, contact the local consumer protection agency for support.
3. Notify Your Bank: If a card was compromised, inform your bank to freeze the account and dispute charges. Most UK banks offer fraud protection for unauthorized transactions.
4. Share Your Experience: Warn other travelers by posting on platforms like TripAdvisor or X, using hashtags like #TravelScams. This helps others avoid similar traps.

Cultural and Destination-Specific Tips

Different destinations have unique scam risks. Here’s a quick rundown:

• Europe: DCC is rampant in tourist cities like Paris or Amsterdam. Always pay in euros and check ATM security in busy areas.
• Asia: Street changers are common in markets in Thailand or India. Stick to banks or order currency through TravelCash for peace of mind.
• Middle East: In places like Dubai, “zero commission” booths may offer poor rates. Compare rates online before exchanging.
• Americas: In the US, ATMs may charge high withdrawal fees ($3-5 per transaction). Carrying enough USD from TravelCash can help to minimise ATM use.

Researching local customs, like whether cash or cards dominate, can also guide your planning. For instance, Japan and Germany prefer cash for small transactions, while Scandinavia is nearly cashless.

Avoiding currency exchange scams boils down to preparation, skepticism, and sticking to trusted providers. By researching rates, using TravelCash.co.uk, and staying vigilant, you can protect your travel budget and focus on enjoying your trip. Pre-ordering your currency not only saves money but also gives you confidence that your funds are secure from the moment you land. Whether you’re exploring the temples of Kyoto or the beaches of Bali, smart money management ensures your adventure stays memorable for the right reasons.