Financial institutions have failed to inform the public properly about the implications of the euro and its effect on charges, but there is competition in the foreign exchange market, according to the Director of Consumer Affairs.

Speaking to the Oireachtas Joint Committee on European Affairs yesterday, Ms Carmel Foley said that, following spot checks by her staff in a variety of branches in each of the foreign exchange providers, serious deficiencies in providing information to customers were found in the majority of branches.

Ms Foley said she was very concerned that the survey had revealed that, in many instances, the staff of the institutions did not appear to be fully au fait with the implications of the euro and, in some cases, were unable to answer the most basic questions relating to conversion charges and how they differed from preeuro days.

"From a customer's point of view, this is not acceptable and the lack of available literature in branches compounded this problem, leaving these customers with no option but to either accept the charges without question or to query them at another source, such as my own office or through the newspapers."

Ms Foley said , in many cases, 80 per cent of the branches of providers had such deficiencies, including outdated information leaflets.

When questioned by the committee as to what explanation the foreign exchange providers had given, Ms Foley said institutions blamed it on their inability to get and hold on to staff.

She said this was "not a good enough excuse" but the providers had committed themselves to intensifying their efforts to train staff on foreign exchange conversion with the introduction of the euro.

Ms Foley said that, already this week, she had had meetings with representatives of six of the 15 providers - AIB, NIB, Bank of Ireland, Fexco, Irish Nationwide and Irish Life & Permanent - about the matter. She plans to meet representatives of the remaining providers in the next week. When asked what course of action she could take against the providers, she said she had no power to impose penalties and all that she could do was keep hounding them, although she did intend to make a statement after she had met all 15 providers.

However, Ms Foley said that the charges applied by institutions showed competition did exist in the Irish market.

She said some foreign exchange providers had started to undercut each other and were charging lower rates than the level authorised by her office.

Ms Foley also pointed to the withdrawal of the EBS from the market and the closure of the American Express exchange office in Galway city as further evidence of decreasing profit margins on transactions, and competition in the Republic.

The Irish Banking Federation director general, Mr Jim Bardon, said the financial industry had honoured its commitments on reductions in charges and transparency. He said: "These reductions have exceeded what was anticipated by the European Monetary Institute and, as a result, Irish consumers now get more foreign currency for their Irish pounds".