Dishonest exchange offices are vanishing from city property, but still can be found on private property, Prague City Hall has closed 11 exchange offices so far. This includes offices that were recently shuttered in Old Town Square, Můstek, and Wenceslas Square.
“Exchange offices in the premises of the Prague Public Transit Company (DPP) were closed after mutual consultation. Those that were in municipal buildings have all been terminated,” City Councilor Jan Chabr, (United Force for Prague), responsible for city property, said, according to daily Pražský deník.
Prague Mayor Zdeněk Hřib (Pirates) said the exchanges used deceptive practices. The city is powerless over offices housed in private property, though, as it can’t intervene in private leases. The city also cannot regulate the offices, as the Czech National Bank (ČNB) is responsible for oversight.
The affected exchange offices had signed contracts with the city, stating that the city could terminate the leases with notice. For some offices, the notice period is still running. The city began to shut exchange offices down in February, though the process takes time.
“I am not afraid of having a currency exchange in municipal buildings. The problem is that many of them were dishonest. I understand it’s like any business. As the owner of the building, the city has the right to determine what kind of business it wants in its property,” Chabr said. The city does not want Prague to show a bad face to foreign tourists, he added.
People who are not yet familiar with the exchange rate might easily be fooled by signs saying there is no commission, but offering only 17 CZK per euro, when the actual rate is closer to 26 CZK per euro. Hidden fees and service charges are still common, despite recent attempts by the Czech National Bank (ČNB) to crack down.
New rules for exchange places came into effect April 1, though enforcement has been difficult. People can now cancel a transaction within three hours, though many offices simply refuse and tell the patron they have to complain by email or give some other excuse for not complying.
Posting VIP rates is also now banned, as this also causes confusion. The signs can still commonly be found.
In theory, the ČNB could withdraw licenses from repeat offenders. Some exchange offices are getting around this by technically shifting their ownership to a new company after a violation. This allows the same location to stay open, even with the same staff and décor, but a clean business record.