Where’s the Clarity? We wanted to be billed in rupees and got sterling

I have been a keen user of a Halifax Clarity Card for foreign travel over several years. It is highly recommended by Guardian Money, Which? and other columns for its freedom from commission and competitive exchange rates.

Users are, however, advised to specify local currency, not sterling, for transactions. On a recent trip to India, I did just that, except for one small one at the start on my trip (which was my error), only to find that five transactions, mostly fairly large, were charged to my account in sterling, at an exchange rate over 5% worse than if they had gone through in rupees.

I asked Halifax if it would challenge the rate and that it request the transactions be rejected and re-presented by the merchants’ banks in rupees. Although Halifax has accepted what happened, it claimed to be powerless to act since “we need to authorise this, as this is what we have been instructed to do ... by the merchant”.

If no opposition is made by Halifax, this sort of exchange rate scam will continue. Many customers may either not notice or write it off.

Halifax has offered compensation but that was not the point (the amount was only around £25) and I refused. I may go to the Financial Ombudsman Service but doubt if it will have any traction as I have been offered compensation. CQ, Leamington Spa, Warwickshire

The card is highly recommended and it is therefore surprising to learn of Halifax’s apparent failure to challenge merchants who did not follow your instructions. It has apologised and added a further £75 to your account as a gesture of goodwill for “poor service”.

Increasingly in shops and restaurants abroad, holidaymakers presenting a credit or debit card will be told they can pay in sterling “for convenience”. Unfortunately, “the convenience” is for the retailer who applies a poor exchange rate and pockets the profit.

Halifax says Clarity Card customers should not only request transactions be processed in the local currency, but also ask for a receipt. With such evidence it can then raise a partial chargeback under MasterCard regulations.

If you want to go to the ombudsman there’s a strict timescale. You must do so within six months of receiving the letter from Halifax (which was dated 11 January 2016) but your case should not be jeopardised by the compensation.

We welcome letters but cannot answer individually. Email us at consumer.champions@theguardian.com or write to Consumer Champions, Money, the Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number