The Prague City Council has started delivering on its promise to close down
dishonest exchange offices that rip off foreign visitors to Prague.
A number of them still offer high commissions with some selling the euro for 16 crowns compared to the official exchange rate of just over 25 crowns per euro. Or else the offer „zero commission” and favourable exchange rates that only apply to large transactions.
Two such Chequepoint outlets have been closed since November of last year and councillors are looking at around two dozen others which may follow suit.
Last year MPs approved an amendment to the Exchange Act that will allow customers up to three hours to cancel a currency exchange transaction that they find to be highly disadvantageous and get their money back, but the law will only come into force in April of this year.
Exchange offices set their rates independently of the official exchange rates announced by the Czech National Bank.
MPs have approved an amendment to the Exchange Act that will allow
customers up to three hours to cancel a currency exchange transaction at
bureaux de change and get their money back.
The aim is to protect tourists from unfair bait-and-switch practices, such as promising “zero commission” but offering favourable exchange rates that in fact only apply to large transactions.
Bureaux de change set their rates independently of the official exchange rates announced by the Czech National Bank. Under current law, they are obliged to publish on their exchange rate list only the least favourable exchange rate it offers.
The amendment also tightens rules for advertising a more advantageous offer of exchange rates, registering exchange obligations, and defining the boundary between currency exchange and payment services.
The Czech central bank has stripped the company Chequepoint of its licence
to operate exchange offices, the ctk news agency reported.
The bank said the decision was made on the grounds of repeated violations of the law, such as failing to inform clients in advance about their rights and details of the transaction.
The company reportedly also failed to comply with regulations introduced to combat money-laundering. In addition to having its licence taken away, Chequepoint was fined 1.2 million crowns. The company had been fined on previous occasions and failed to take any corrective measures.
The Czech government has moved to address one of the frequent woes of foreign tourists in the Czech Republic –losing money in a disadvantageous exchange rate transaction. Under the approved amendment to the Foreign Exchange Act, multiple exchange rates will no longer be allowed and clients will be able to withdraw from a disadvantageous transaction within two hours of making it.
The acting Czech government has approved legislation aimed at reining in
exchange offices that rip off customers. Under the bill it will be possible
to abrogate a transaction and receive one’s money back for a period of up
to two hours. The change was proposed by the Czech National Bank.
The minister of finance in resignation, Alena Schillerová, said it was no secret that the practices of some exchange offices were giving the Czech Republic a bad name.
The minister said tourists might receive only CZK 15 to the euro from some currency exchanges on Prague’s Old Town Square. The standard rate at present is almost CZK 26 to the euro.
The Czech government has turned down a proposal from the lower house of
parliament aimed at boosting legal aid to the poor. The proposal from the
communist party that the state meets at least part of the costs of civil
cases for the poor was turned down.
The communist party has repeatedly backed the move in the past. The government also rejected a proposal from the STAN party aimed at boosting clients’ rights when changing foreign currency. It would have given them the right to back out of transactions within two hours.
And a proposal from the same party allowing high placed government officials to remain on regional councils was also rejected.
Prague is considering a campaign aimed at alerting tourists to sharp
practices by currency exchange booths and those offering currency exchange
on the streets. The move is being weighed following a similar one already
carried out targeting dishonest taxi drivers. It could include leaflets in
hotels and tourist hotspots.
Tougher moves, regulating the exchange rate offered, have been proposed by the Pirates party. The Czech National Bank is the main organ regulating exchange offices and has increased the number of checks and actions taken against them over recent years.
Many tourists exchanging money at such offices or on the street are unaware of what the official exchange rate is or what Czech bank notes look like, making them easy prey to conmen and sharp traders.
In this week's Business News: The Czech Republic leads the EU in the percentage of plastic packaging being recycled; Friday’s early trading saw the Prague bourse slump by 14 percent; the head of one of the companies building a new Hyundai factory in Northern Moravia has accused the company of cutting corners in construction; the seemingly endless Czech housing boom appears finally to be slowing down, according to experts in the industry; Czech trust funds are in their worst condition since the terrorist attacks of 9/11 and Czech anti-corruption
Police in Prague say they’ve uncovered a huge money-laundering operation located in the city centre. According to the police anti-corruption unit, a firm based on Prague’s Narodni street had laundered hundreds of millions of dollars, apparently via a bureau de change and a complex of holiday apartments.