American Express Traveler's Checks ripoff New York New York

Yearlier this year, I bought AmEx Traveler's Checks on $10,000. They claim that these checks can be cashed accross the world with no fee at participating banks. When I cashed the checks I had to spend about $180 for this service that has been advertised as "free".

Details below:
In May 2005, I went to Moscow and wanted to cash the checks in dollars. I called AmEx in Moscow for the list of participating banks. They named a couple of banks.

I went to one of them and it turned out that the bank would charge 1.5% fee + tax (18% of the fee).

I called AmEx again, they confirmed that if I wanted to cash the Traveler's Checks in dollars outside of US, I will be charged a fee. Checks can be cashed "for free", they said, only in local currency.

I contacted the bank again and the bank confirmed that the checks are cashed for free in local currency. I asked for exchange rate and they named a rate that was effectively 6% worse than the market rate. I called other banks, and they gave me the save quote. When I wondered where this exchange rate is coming from, they said that AmEx required them to use this ripoff rate.

When I called AmEx and complained that information on their website is misleading, they answered that the checks are being cashed "for free" and that there is no mention of exchange rate and "if you asked, we would have told you the exchange rate right away".

It was much cheaper to cash the checks in dollars and then exchange them in local currency than cash the checks in local currency in AmEx partner banks, which I ended up doing spending about $180 for the service advertised as "free".

Andrei
Chicago, Illinois
U.S.A.