City Hall plans more action against money changers

Exchange bureaus and street con artists have become a hot topic

Prague City Hall will be addressing the issue of money changing due to increased complaints of disadvantageous rates at exchange bureaus and fraudulent transactions by scam artists on the street giving worthless currency instead of Czech crowns. The city also plans to increase its efforts to warn tourists.

The city is planning an information campaign at hotels to warn about the misleading practices of exchange bureaus. The campaign is being promoted by City Councilor Ondřej Mirovský (Green), chairman of the legislative committee.

City Councilor Jakub Michálek (Pirates) has proposed a change in the law that would allow the city to set a maximum deviation from the real exchange rate.

Police say the people involved in fraudulently exchanging money on the street are mostly from the Balkan region, and the problem occurs across Europe.

Prague does not have very accurate statistics on the fraud problem. Theft under Kč 5,000 is a misdemeanor, and the numbers of incidents are lumped together with other petty street crime. Most street money changers keep transactions under the Kč 5,000 limit to avoid serious consequences. Only 16 cases against street money changers were started in 2016, according to Petr Jindra of the Czech Police. He gave information on the issue to the legislative committee of Prague City Hall.

Tourists who go to exchange bureaus in the city center often also get ripped off, with some stands offering Kč 15 to the euro, while the actual bank rate is Kč 26 to the euro. investigative reporter Janek Rubeš, who posts videos under the name Honest Guide, has been focusing on the topic and warning tourists of the predatory practices of some of the exchange bureaus. He previously took on the issue of taxi drivers overcharging.

The police say they lack the authority to take action because they do not have a legal mandate. Money exchanges are controlled by the Czech National Bank, which grants the licenses.

A legal proposal now being considered would allow people two hours to get their money back. This would give police the right to help people if the exchange stands don't comply. The law would have to be changed at the national level, though, for this to be possible.

City Councilor Libor Hadrava (ANO), responsible for security, told Pražský deník that police have been warning tourists near some of the more problematic exchange places, but there is not much more they can currently do.

Since 2013, the law requires full disclosure about the transaction. The money changer is supposed to tell the client the full amount they will receive including all fees and charges in writing in Czech and English. Once the client signs the agreement, it is binding.

The signs with the rates, though, are often confusing. Many places have signed with the favorable bank rate posted prominently, while the actual unfavorable rate they offer is hidden close to the ground.

News server earlier this year ran a series of articles exposing some of the tricks that exchange places use and also listed several of the places that were hit with the largest fines. One company was fined Kč 600,000 in 2016 for not specifying its commission rates properly. Another company was hit with a Kč 350,000 fine for in part having the commission rate displayed next to the floor and lacking a license for some credit card transactions. Fines were not limited to Prague. Offices in Brno, Karlovy Vary, and other locations also face sanctions.

The total amount of fines last year was Kč 3.4 million, with the average being Kč 80,000. One license was revoked.

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