FESTIVE adverts are upon us as retailers vie for our seasonal spending sprees. Some of us will be lucky enough to travel abroad for Christmas shopping trips, while others are already busy saving up for next year’s holiday in the sun.

If you find yourself abroad any time soon be careful to avoid being scammed with over the top currency fees.

Known as dynamic currency conversion fees (DCC) can be applied when you use your debit or credit card to pay for goods or services in a European country.

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If you are offered the option of paying either in sterling or euros you might think it is better to pay in pounds as you will know precisely what you are about to spend.

But that is the very worst thing you can do. Paying in sterling means a local bank is entitled to set your currency exchange rate, which can turn into a free for all with local retailers often incentivised with a currency commission on the sale.

It is common for around six per cent to be added to your bill if you convert to sterling, but it could be much more. The golden rule is to always pay in euros, or whatever the local currency is. That way you will secure the best currency exchange rate by your own bank back home.

Some UK banks do not charge any fees for transactions abroad, but many will charge you around two to three per cent when you make an electronic payment. Check your current account or credit card provider, and if they are not competitive you can always switch for a better deal. Taking money from an ATM abroad generally results in an extra charge for each withdrawal.

It is also worth being alert to a variation of this classic holidaymaker scam. When making a card payment you will be invited to enter your PIN on a handheld machine, however, when the merchant takes the machine back it may still be possible for the retailer to process the payment in sterling.

Where possible try to keep your eye on the transaction as it goes through and make it clear you want to pay in euros. Card providers say you should be asked whether you want to pay in sterling or euros and your consent should be obtained. However, that does not always happen in practice.

Always get your receipt and check whether the payment has been taken in euros. If it has not, you should dispute it and ask for the transaction to be voided. Make sure you are given a void receipt and then ask for the transaction to be processed correctly in euros.

If all else fails, contact your credit card provider or bank immediately and log a complaint that you had asked to pay in the local currency but your instructions were not respected and you were scammed in unfair DCC fees. Your card provider can take the issue up with the retailer’s overseas bank.

You may be wondering how DCC fees have been allowed to become so costly? Particularly so, when it is estimated that Scottish and UK tourists pay around one third of a billion pounds in card fees while abroad each year, with DCC fees accounting for a massive chunk of this.

The answer lies in the fact that the relevant bit of EU law only equalises cross-border and national payments in euros within the European Union. This is known as the Single Euro Payments Area.

Member states within the EU are entitled to apply these laws to non-euro currencies on a voluntary basis but only Sweden has chosen to do so for the kronor. Romania initially agreed to do so for the lei, but then failed to follow this up. The European Union is currently consulting on this very subject. If change happens – and it might not – it will not be anytime soon.

So meantime, always remember the golden rule for shopping abroad in the EU with your debit or credit card. Always pay in euros, not sterling. And check you receipts to make sure you have not been fleeced.

Mike Dailly is a solicitor advocate at Govan Law Centre.