Exchange offices to face tighter regulations

People may get up to two hours to get their money back in case of a bad deal

Money exchange offices are one of the stumbling blocks in tourism, and the country has been trying for a long time to change the situation.

The Czech National Bank (ČNB) and Czech Finance Ministry now want to make a law that would allow people to cancel an unfavorable exchange within two hours. Exchange offices would also have to display only one exchange rate, and not a separate VIP rate.

The Finance Ministry says that technical details of the law still needed to be sorted out. The changes could take place at the end of 2018 or start of 2019.

The situation at exchange offices has been highlighted in several international news reports and also locally by Janek Rubeš in his Honest Guide online video series. Rubeš has been pushing for people to do more than just document the problem. He wants to see some changes to protect the consumer.

The opportunity to cancel the deal would help to fix the situation, according to ČNB board member Tomáš Nidetzký. “This means that if they later find that the exchange was disadvantageous because they compared it with another exchange office and with other rates, they could return to the original exchange office within two hours and ask for a refund,” Nidetzký told daily Lidové noviny (LN).

Rubeš told LN he was excited about the proposed legislation. “Most people will realize that they have been ripped off as soon as they recalculate their money. This would offer an immediate solution, which would be great,” he said.

In his videos, he shows some exchange office tricks. Some offices he shows take more than 30 percent in fees and commissions. One office he visited took 42 percent of the money in fees. “Anyone who visits one of these exchanges must consider Prague to be the Wild East,” he added.

Aside from offices near Old Town Square, Rubeš has found that high fees and commissions are charged at Václav Havel Airport Prague.

Currently people who feel they have been cheated can turn to the ČNB, but the central bank lacks the authority to reverse a transaction. The number of complaints has been low, only some 162 last year. Rubeš says the number of people affected is much higher, as many do not know where to complain. Hundreds of people are ripped off daily, he said.

More can be done in the meantime to protect tourists. Rubeš suggested a team of people to patrol the city center to warn people looking to exchange money about what to look for.

City Hall, though, says that exchange offices are not part of their legal responsibility and any action would have to be taken by the ČNB.

In another proposed change, the ČNB also wants to make exchange offices use just one rate, as currently many offices offer a VIP rate and feature it prominently. But this favorable rate is not what most people get, so posting it is misleading. Better rates could be discussed on an individual basis but not posted for advertising.

Rubeš in his videos says that many offices now have multiple exchange rate cards displayed. A sign showing the current official bank rates is prominently displayed, while the much less favorable rates the exchange shop actually gives to people are a bit harder to find on a sign that is close to the floor.

Video on YouTube

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