How scammers profit from misleading exchange rates

Ever handed over your cash to a friendly currency exchanger only to realize later you got seriously ripped off? Yeah, you’re not alone.

Currency exchange scammers are basically math magicians. They count on you being jet-lagged, unfamiliar with the local currency, or simply too excited about your vacation to double-check their calculations.

The most common trick? They’ll advertise “No Commission” in big, bold letters. Sounds great, right? But they’re actually hiding ridiculous markups in the exchange rate itself. While legitimate exchangers might charge a small visible fee but give you a fair rate, scammers do the opposite.

For example, if the actual exchange rate is 1 USD = 0.85 EUR, a scammer might offer you only 0.70 EUR per dollar. On a $500 exchange, that’s a loss of about €75 – enough for a nice dinner or a tour you’ll now have to skip.

Another classic move is the “fast count.” They’ll count your money quickly, claim you gave them less than you actually did, and shortchange you on the exchange. Or they’ll slip in damaged, outdated, or even counterfeit bills among your legitimate currency.

Popular tourist locations where this scam thrives

This scam is practically universal, but it’s especially rampant in:

• Airport kiosks – They know you’re tired and need local cash immediately
• Tourist areas in Prague, Budapest, and Istanbul – Where currency confusion is common
• Bangkok’s Khao San Road – Famous for street exchangers offering “special rates”
• Times Square in New York – Where everything is overpriced, including currency exchange
• Train stations throughout Europe – Particularly in Rome, Paris, and Barcelona

Basically, any place with heavy tourist traffic becomes a hunting ground. These scammers set up shop in highly visible locations, often with flashy signs and aggressive touts who’ll practically drag you to their booths.

Simple calculations to quickly verify fair exchange rates

The math isn’t as hard as scammers hope you’ll think:

1. Know your baseline rate: Before traveling, check the mid-market rate on Google or a reputable site. Write it down or save it on your phone.

2. Calculate the percentage difference: If the mid-market rate is 1:20 and you’re offered 1:17, that’s about a 15% markup – way too high.

3. Use the 5% rule: Most legitimate exchanges charge between 2-5% in combined fees and rate differences. Anything higher deserves a walk-away.

4. Round numbers for quick mental math: If the real rate is 1:23.45, round to 1:23 or 1:24 for faster calculations on the spot.

Mobile apps that help determine current exchange values

Your smartphone is your best defense against these scams:

• XE Currency – Updates exchange rates in real-time, even works offline after initial setup
• Currency Converter by OANDA – Shows historic rates so you can track trends
• Wise (formerly TransferWise) – Displays the mid-market rate and offers a card that gives great rates
• Currency App by ExtraAndroary – Simple interface with quick calculations
• TravelSpend – Combines budget tracking with currency conversion

Most savvy travelers now just skip exchange booths entirely and use ATMs or cards with low foreign transaction fees. The rates are almost always better, and there’s a digital trail if something goes wrong.