Exchange offices shun law

Legally binding instructions from the Czech National Bank (ČNB) for money exchange kiosks to display the official exchange rate are being ignored, and one whistle-blower accused the exchanges of fraud and preying on the "gullibility" of unsuspecting tourists.

Currency exchanging is among the top three tourist complaints, behind pickpocketing and overcharging on taxis, according to the Czech Association of Tour Operators and Travel Agents.

The association has sharply criticized the instructions as "half-hearted" and accused the ČNB of "not giving a damn" about the issue.

A worker at one of the kiosks who requested anonymity due to fears of losing his job told The Prague Post the entire business model is fraudulent and geared toward tricking customers. "Every exchange office has rates displayed in huge fonts they use to attract tourists that are only valid when you exchange large amounts of say 20,000 to 30,000 Kč." he said.

He also said profit made from customers varies, depending on their bargaining skills.

"Bargaining is an important part of the exchange office business," he said. "They will offer a client 1,900 Kč for 100 euros (when it should be approximately 2,500 Kč) and take advantage of the fact clients don't ask how much they will get in reality. They can earn 600 Kč on one client if the client doesn't ask the right questions."

According to the instructions, kiosks must display the official exchange rate for currencies along with their own, make any relevant information pertaining to transactions of an appropriate size, display the amount of money being charged for transactions and, finally, declare the amount of money given back to customers prior to the exchange.

The instructions are part of the Foreign Exchange Act, which took effect Nov. 1 and are legally binding.

"The aim is to give clients enough details to enable them make an informed decision. It contributes to enhancing transparency from the exchange offices perspective and limits the space for deceitful practices," said ČNB spokesman Tomáš Zimmerman.

But Tomio Okamura, vice president and spokesman for the Czech Association of Tour Operators and Travel Agents, disagreed, and said the instructions are confusing.  

"The directive is half-hearted, and the whole thing is very bewildering. It was not consulted with either City Hall or with our association," he said. "The decree does not address specifically the minimum size for the new data, nor does it say clearly how the exchanger would provide vital transaction information prior to completion. It simply appears the ČNB does not give a damn and doesn't perceive the issue as a big problem."

The ČNB said that, over the course of a year, it only received about 80 complaints on the matter. But Okamura dismissed this.

"I consider it a statement of top-notch incompetence. The overwhelming majority of foreigners do not know what the ČNB stands for or that it is responsible for exchange offices," he said. "Nor do they speak Czech and can't write up a complaint; they usually just give up and do not come back to the Czech Republic."

In the meantime, tourists continue to use exchange kiosks, not knowing they have been victimized until after they glance at their receipts, as in the case of Arad Simon and his girlfriend, visiting Prague for few days from Israel.

"It's a huge rip-off. These signs mean absolutely nothing," he said.

Others are more cautious, like Carol and Drew, visiting from Chapel Hill, North Carolina, who declined to give their surname.  They read about the problem on the Internet and conferred with friends who had visited the country. They decided to avoid the exchange kiosks altogether.

"We wouldn't use one of those things; at least, that's what Tripadvisor.com told us. We have our [credit] cards; it's just better. We use an ATM at a real bank. The rates may be a little high, but at least you know what you're paying," Carol said.

- Klára Jiricná contributed to this report.

Philip Heijmans can be reached at
pheijmans@praguepost.com