Two decisions made by UOKiK concerning Interchange and Money Exchange
In Poland there are almost 5,000 exchange bureaus. The Office of Competition and Consumer Protection (UOKiK) had doubts about the way the FX rates are presented on the boards by the exchange bureaus of the “Interchange" network.
The Competition Authority initiated proceedings at the end of 2016. The action was based on a notification by the National Bank of Poland. The UOKiK also received complaints directly from consumers, including foreign tourists who had been misled about the FX rates.
Normally the left column shows the buy rate, and the right one shows the sell rate. The exchange bureaus operated by Interchange Polska and Money Exchange Poland (and working within one “Interchange” network) presented the FX rates in reverse order, so many customers thought they were exchanging foreign currency at a higher PLN rate, presented on the left side of the board. Actually, the difference in relation to other exchange bureaus was even 30%. For example, consumers received about PLN 300 for EUR 100, instead of about PLN 400. UOKiK issued two decisions.
“In the course of the proceedings, it turned out the exchange bureaus had been receiving customer complaints for several years. As a result, they cancelled a significant number of transactions. We asked competitors who use the correct boards about the number of complaints. Result? They did not receive requests to refund and the number of cancelled transactions was zero or marginal. This confirms we expect the left column on the board to present the buy rate and the right column to present the sell rate. We made the decision on Immediate enforceability. This means the undertaking must change the boards immediately. Money Exchange voluntarily changed its practice”, says Marek Niechciał, the President of UOKiK.
Money Exchange avoided a fine, while Interchange was charged over PLN 1.2m (PLN 1,238,332). This amount was determined by the fact that this exchange bureau had not change its practice, despite the earlier admonition by UOKiK. Moreover, the practice has occurred in large cities throughout the country (Warsaw, Gdańsk, Gdynia, Cracow, Katowice, Wrocław) for more than four years. The undertakings must publish the decisions on their websites. The decisions are not legally binding, both companies appealed.
We receive signals that other exchange bureaus might also use FX rate boards with reversed columns. They may mislead customers, therefore we will check the practices of other exchange bureaus.