While international travel is generally safe, there are some known scams to watch for, particularly where money is concerned. Here, we’ll take a look at two common types of travel scams: Reverse exchange rate scams and Money exchange scams. In addition, we’ll provide some valuable pointers for avoiding them.
Reverse Exchange Rate Scams
While the reverse exchange rate scam can happen practically anywhere, it is most prevalent in Central America, particularly in places like Honduras, Costa Rica, and Nicaragua. The scam goes something like this: You arrive at a border crossing and need local currency, so you let the money handler take care of it – it’s his job, right? He says the exchange rate is 1.2, and you think this sounds about right. He takes his calculator out and divides the amount of money you have by 1.2. In reality, he should have multiplied your money by 1.2, not divided it by 1.2; now, you’ve lost money simply because you weren’t really paying attention, and because scammers count on tourists to be somewhat befuddled.
To avoid this situation, pay attention to exchange rates, and provide yourself with a basic education in currency exchange. While victims end up feeling foolish in many cases, chaotic situations are common at border crossings, and most of us just want to get on with our travels. Stay alert, and act as if you know exactly what’s going on, and shady money exchange workers will most likely decide against choosing you as a target.
Money Exchange Scams
There are a few different ways money exchange scams happen, but most of them have one thing in common: Shortchanging the victim. Often, when large amounts of cash are exchanged, the money changer will warn the victim about “the locals,” and insist that the money should be put away quickly; this prevents unsuspecting victims from counting cash until much later – and by then, crooks have gotten away with the scam.
In some cases, banks and other official businesses are the only parties legally allowed to exchange money. Illegal money changers can run rampant in places like this, and they play on the tourist’s sense of thrift to convince people to allow them to exchange money at a lower cost than officials charge. In some cases, they’ll simply shortchange in the same way reverse exchange rate scammers will. In other instances, they provide counterfeit bills, and in still other cases, they perpetrate an even more elaborate scam. This third method relies on a helper, who “proves” the scammer provides fair service. The scammer then counts out local money, taking your $20 or $100 bill. He gives you the wrong amount of local money on purpose, then becomes loud and agitated when you are confused. He says “never mind,” and hands you a folded American bill before stomping off. All this happens very quickly, and by the time you go to put your $20 or $100 bill back into your wallet, you unfold it to find you’ve been handed a dollar bill, and the rest of your money has been stolen.
These scenarios are fairly common, and once a scammer has made off with your money, there’s not much you can do. To avoid money exchange scams like this, deal with legitimate businesses only, and keep your guard up. While it can be tempting to save a few dollars by dealing with illegal money changers, you could end up losing quite a bit of cash.
To avoid these problems altogether, consider using travelers’ checks or obtaining foreign currency before departing on your trip. You can also use a debit or credit card for most transactions, and use only a little cash for small purchases and tips. While you may not get the best exchange rates this way, you won’t end up being scammed either; and being prepared can help you to simply relax and enjoy your holiday.