ČNB exposes rotten currency traders
29. 9. 2016 | Source: BusinessInfo.cz
Cheating Prague foreign exchange bureaux incur more fines.
They are rather stingy when it comes to both currency exchange fees and sales slip information, while also presenting such data in a way that means the customer may very possibly miss it. That’s the picture of Prague money changers painted by a list of sanctions levied this year by the Czech National Bank [ČNB].
The central bank, it appears, has been cracking down on foreign currency businesses in the capital. Around a dozen wrongdoing currency trading firms operating in central Prague have so far this year paid regulatory fines amounting to CZK 1.25m, which is almost one-half more than what was demanded in the same period of last year.
“Among the most frequently discovered deficiencies were the withholding of exchange rates and service prices in informing clients. Although both featured in the pre-transaction information, their level in the concluded transaction was not always in accordance with what had been stated,” ČNB said in an assessment of the traders’ main sins.
Gaining the required set of information for a transaction often proved far from easy. In its ruling against illicit 2014 and 2o15 operations of the trader International Currency Exchange, ČNB said: “Information on payments for buying and selling foreign currencies was printed in unreasonably small white lettering on a blue background in a continuous text also containing other information. Screens with the exchange rate lists were situated in a way which meant the data was entirely unintelligible to the client.”
The firm runs a great many branches across a swathe of Prague that is most attractive to tourists, starting in Wenceslas Square and Na Příkopě and extending down to Karlova street. The foreign currency trader was fined CZK 600,000 by the regulator for improper practices that included only letting the customer know the final sum of purchased currency as well as the overall cost of fees at the very moment the money was handed over. The summary was not presented sufficiently in advance, something which the law requires.
In a decision on exchange bureaux firm City Change, ČNB stated: “They were focusing on tourists from abroad who find it harder to orientate themselves in a foreign environment where their chances of defending themselves are more limited.” At the end of last year, a City Change branch in Loretánská street near Prague Castle was apparently exploiting an ingeniously designed price board, arranged so that charged fees were beyond the client’s field of vision. The penalty for this firm climbed to CZK 350,000 partly because undercover ČNB employees who were scrutinising its conduct were not given any documentation covering the full transaction.
Originally published in E15 weekly, economic and business newsmagazine. Author: Jaroslav Bukovský