Exchange law passes lower house

Customers may get three hours to cancel a disadvantageous exchange

Money exchange customers may soon be able to cancel their transaction within three hours. An amendment to the current law was approved by the Chamber of Deputies. It still needs to be approved by the Senate and signed by the president before it can take effect.

The vote in the lower house was 157 in favor and five opposed.

The amendment is aimed at preventing unfavorable exchange practices committed against tourists in the center of Prague.

“It is no secret that the practices of some exchange offices, especially in the center of the capital, do not give the Czech Republic a good name. In Old Town Square, a tourist can get Kč 15 per euro or be charged a fee of 28 percent,” Finance Minister Alena Schillerová said. A euro should exchange for around Kč 25.

Exchanges can set rates at their own discretion, as long as they follow the law about posting the rates.

"Unfortunately, it appears that customers are not always guided by the mandatory disclosures. In addition, the transaction is often deliberately made more confusing by various VIP offers or differing rates. The disadvantages of the transaction can be noticed later by customers, which, in the case of tourists, can ruin the rest of the vacation as well as the overall impression of a visit to our country,” Schillerová added.

The amendment is intended to increase the protection of exchange clients and to clarify certain provisions of the Foreign Exchange Act. Its main point is the new possibility for customers to withdraw from the transaction within three hours. This is an hour longer than the government-approved draft. Lower house deputies did not accept a proposal by Jacob Michálek (Pirates), who wanted to extend the withdrawal period for up to four hours.

Information on the right to cancel the transaction will be printed on the receipt from the exchange office. The receipt will also have 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 rate changes. The Finance Ministry says 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.

Offering VIP rates will no longer be allowed. In addition, there will be a ban on payment of a service fee.

The Association of Exchanges (AS) and the Czech Banking Association (ČBA) both previously said they disagree with the amendment.

The ČBA said banks will have to invest millions of crowns in new IT systems to comply with the changes, and may get out of the exchange business completely.

Exchange offices giving poor rates has been a topic of several videos produced by Janek Rubeš, who posts on YouTube under the name the Honest Guide. In June, these led to one of the exchange companies that offered the worst rates losing its license.

Video on YouTube

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