|Published:||12 Jul at 6 PM|
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Recent reports are warning expats in Prague that local currency exchange offices are not complying with new consumer protection laws.
Despite the recent introduction of harsh new consumer protection laws, it seems a number of currency exchange firms are continuing with their deceptive practices in spite of being caught and fined by the Czech National Bank. The new laws were brought in on April 1 following a series of videos uploaded to YouTube by an online reporter exposing the exchange offices’ deceptive practices. The reporter, Janek Rubes, is well-known as the ‘Honest Guide’, but it now seems the capital’s currency exchange outlets are simply ignoring the new rules and continuing to scam their clients.
For example, the offices must now allow clients to reverse their transactions within three hours should they discover they were not favourable. Another trick now banned but still widely used is the so-called ‘special VIP rate’ list which advertises better rates without explaining these rates are rarely used. It’s a ‘bait and switch’ technique widely used in the retail sector, but is now illegal in currency exchange. The difference between ‘VIP rates’ and the daily rate can be as much as nine points lower.
Recently, one exchange office close by Wenceslas Square which was still posting VIP rates to lure expat clients was fined CZK 500,000 but is still advertising the VIP rate. Oddly, although many individually owned exchange offices are doing the same, their deceptive signs are all identical. In addition, the three-hour right to cancel is now not being honoured, even when a client disputes the deal and presents the required receipt noting the time the exchange took place. Some offices have now stopped providing time-stamped receipts and others are only cancelling transactions if they were recorded on camera. In addition, service fees are now banned but are still being charged.
The new laws entitle the Czech National Bank to cancel exchange offices’ licenses should they be found contravening the new rules, but a number of offices caught violating the new laws are now transferring ownership to new companies and continuing to trade. The battle between the authorities and the currency exchange booths has been ongoing for literally decades, with new laws being followed by ingenious workarounds ad infinitum, leaving the onus on expat customers to attempt to find honest brokers.
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