Many Prague exchange offices ignoring new consumer protection rules

Despite tough new laws, many exchange offices in Prague are
continuing their old deceptive practices. The Czech National Bank
(ČNB) has already fined several exchanges
for violations, but this has not discouraged them.

Clients, for
example, now have up to three hours to reverse a transaction if they
determine it was unfavorable.

Another tactic that
was banned but is still used is the special VIP rate list, which
causes confusion with clients as the rates seldom apply to the
transactions that people make. People exchanging money see a sign
with what looks like a favorable rate, but in practice get much less
money in return.

The difference
between the regular rate and VIP rate for one euro can be as much as
CZK 9 lower, and for changing 100 euros, a client can lose CZK 900,
according to a followup report by Rubeš for Czech news server
Seznam.cz.

The Chivas Invest
exchange office on 28. října street, near Wenceslas Square, was
fined CZK 500,000 by the ČNB but continues
to post a VIP rate, according to a recent Seznam.cz report. They
added that this was far from an isolated case. And while many
exchange offices have different brand names, the deceptive signs are
identical, the report added.

The right to cancel
the transaction in three hours also is not being honored at many
exchange outlets.

In order to dispute
the transaction, the client needs a receipt with the time printed on
it. In many cases, the offices have stopped giving receipts.

A video report by
Rubeš showed that many exchange offices would not honor the law on
canceling the transaction unless a camera was present.

In theory, the ČNB
could withdraw
licenses from repeat offenders. Some exchange offices are getting
around this by technically shifting their ownership to a new company
after a violation.

The law that came into effect April 1 states information on the right to cancel the transaction in three hours has to be printed on the receipt from the exchange office. The receipt also has to include the website of the Czech National Bank, which will provide information on customer rights.

In order to withdraw
from the contract, the law sets a limit of 1,000 euros to avoid
speculation on short-term rate changes. The Finance Ministry said
this covers up to 95 percent of transactions.

If the transaction
is done by a cash machine, customers will be able to withdraw from
the transaction within three business days at any office of the
company.

In addition to
banning VIP rates, there is also a ban on payment of service fees.

The city and the
state have been trying to address the situation with exchange offices
for decades, but often the exchange offices find ways to work around
the restrictions such as posting the actual rates below eye level,
posting the reverse rates or including an expensive map in the
transaction that the client did not ask for.