ATM currency trap: Costly fees await unwary travelers

The Norwegian Consumer Council strongly advises travelers to always select the local currency when making purchases or withdrawing cash abroad to avoid unfavorable exchange rates. Many ATMs and payment terminals abroad employ deceptive designs, including flags and misleading warnings, to trick unsuspecting Norwegians into choosing Norwegian kroner, a choice that almost invariably leads to higher costs.

Thomas Iversen, a specialist at the Consumer Council, explains that ATM systems are often designed to prompt users to withdraw money in Norwegian kroner. This option typically includes a "hefty fee," with a markup of six to seven percent. When travelers opt for the local currency instead, their own bank handles the conversion, which is generally a more economical choice.

"If you do the opposite, you often have to pay for an often much more expensive exchange rate," Iversen stated. "This can mean a markup that can often be three or four times as high."

Data from 2017 indicated that approximately 42 percent of Norwegians would let the ATM or payment terminal handle the currency conversion. Iversen points out that the design and presentation of fees can vary significantly, confusing people and leading them to make the less advantageous choice. "People are misled by arrows, flags, colors, and incorrect warnings into choosing the worst exchange rate," he said. "For example, the local currency might appear as abbreviations, while kroner is shown with a flag – specifically, a Norwegian flag for Norwegians. We humans are quick, and we perceive images faster than words. So when we see a Norwegian flag, we tend to press it."

Another potential pitfall involves additional significant fees even when local currency is selected, with users being asked to approve the exchange. In such cases, it is possible to decline the proposed currency conversion and still withdraw cash without incurring excessive charges, a point previously highlighted by Nettavisen.