Three money exchange offices in Prague have lost their licenses for posting confusing rate information, in violation of the updated Foreign Exchange Act. These are the first exchanges to lose their licenses for not meeting the new conditions. The final decisions have been published on the Czech National Bank (ČNB) website.
The ČNB withdrew the licenses from Pemex Change, Exclusive Change and Chivas Invest, all located in the center of Prague. In addition, Exclusive Change has been fined 2 million CZK, Chivas Invest 2.5 million CZK, and Pemex Change 3 million CZK.
The ČNB Bank Board confirmed the decision on January 23. The final decision came into force on 3 February. The affected exchange companies can still appeal to the Administrative Court.
The law governing exchange offices was amended in April 2019 to forbid posting confusing exchange rates or VIP rates. The reason for banning VIP rates is that they seldom apply, but customers are likely to mistake them for the rate they will get.
The law also now allows people to reverse the exchange within three hours if they find out it was unfavorable, and has other regulations that apply to exchange transactions using ATM machines.
Repeated inspections by ČNB staff revealed that the three exchange companies posted VIP rates and that the exchange rate lists did not contain all the information required by law. The exchange offices also repeatedly failed to allow clients to cancel the exchange within the three-hour window. The companies had already been fined CZK 350,000 to 500,000 CZK in the past.
Since 2010, the ČNB has withdrawn licenses from 23 exchange offices.
Along with taxis overcharging customers, unfair exchange offices have been a long-term back eye in Prague’s tourism industry. Prague’s City Hall has canceled the leases of several exchange offices that were leasing city property, but the city is powerless to regulate the industry in general, as it falls under the control of the ČNB.
One of the most high-profile closures was of an exchange office on Old Town Square, after a series of videos by Janek Rubeš, who posts on YouTube under the name the Honest Guide, exposed their practices. The ČNB finally closed Chequepoint in June 2018 due to repeated violations of three financial laws and fined them 1.2 million CZK.
Rubeš has continued to follow the issue, exposing offices that refuse to cancel unfair transactions and looking for the people behind the companies that run the exchanges.