Don't accept verbal quote of exchange rate in a money exchange transaction. See to it that the offered net rate of exchange is clearly written in a note before handing over any money.
This may seem like simple enough advice but many apparently have not followed suit - much to their regret later.
Complaints against money changers rose 100% last year with 97 cases compared with 49 cases in 2012. In the first 4 months of this year, the number stood at 26 cases.
In a complaint involving the exchange of US$3,800, the complainant was quoted an exchange rate of HK$7.75 to US$1.00, to which he readily accepted and received in return a sum of HK$28,500 - but without the issue of a transaction note to him.
Only afterwards when he counted the money, did he realize that it fell short of the equivalent amount of HK$29,450 he was led to believe on the exchange rate quoted. He immediately returned to the shop which contended that the conversion rate offered was HK$7.5, and never HK$7.75, but agreed to raise the rate to HK$7.55 in settlement of the dispute.
On closer scrutiny of the shop, the complainant could not find any board on which were displayed the net rates of exchange - as required under the Money Changers Ordinance. He reported the matter to the Police, and lodged his complaint to the Council seeking cancellation of the transaction and refund.
Upon Police investigation, the shop was suspected to have contravened the Money Changers Ordinance for failure (a) to legibly make out in duplicate a transaction note in the prescribed form; (b) to retain duplicate copy of transaction note for not less than 12 months; (c) to display the US$ conversion rate. The money changer was subsequently prosecuted and fined.
In a similar case, the complainant, a mainland visitor, enquired at a money changer chain outlet for the exchange rate of Renminbi to Hong Kong dollar. The shop's oral reply was "127". To affirm, he asked how much would RMB5,000 be in HK$. The shop gave no direct reply but responded that it could be worked out shortly.
Placing trust on the chain's reputation, the complainant handed over RMB8,000 for exchange. Swiftly a sum amounting to HK$9,016 was produced over the counter, and hastily he was asked to sign a transaction note which he duly complied without going over the relevant details.
Only on completion of the transaction did he discover that the conversion rate stated on the receipt was 1.127 and not 1.27 as previously claimed. He protested against the misleading practice of the shop, and sought help of the Police. Despite Police intervention the matter was not resolved; he later brought his complaint to the Council.
Upon Council's conciliation, the money changer agreed to raise the exchange rate to 1.2 bringing the total of the equivalent amount to HK$9,600; the complainant was invited to collect in person the differential of HK$584 from the shop.
In another case, the complainant in his assumption that the exchange rate adopted for new Taiwanese dollar would be generally about 0.225 (HK$0.225 to TWD1), handed over HK$2,450 in exchange for TWD7,000 as requested by the money changer without any hesitation. No receipt, however, was issued for the transaction.
As it transpired the complainant had been short changed; the shop had used a less favourable exchange rate of 0.35 instead. In protest, he demanded cancellation of the transaction which the shop refused agreeing only to raise the conversion rate to 0.25. When asked for a receipt, he was provided with only a simple cash register printout.
Upon the conciliation of the Council, the money changer was reminded of the requirements stipulated in the Money Chargers Ordinance including the issue of a transaction note in the prescribed form. The shop finally refunded in full to the complainant.
Notwithstanding the regulation of money changers, consumers should take the responsibility in verifying the details of the transaction, including the date of transaction, the type and amount of currency tendered by the customer, the net rate of exchange, and the equivalent amount of the currency to be issued to the customer.
If in doubt, do not sign the transaction note and if necessary, refuse to proceed with the exchange transaction. Under the Ordinance, the consumer has the right to rescind the transaction within 3 days on the ground the money changer has violated the Ordinance.
Consumers are also advised to take note of the current net rates of exchange shown on the display board which money changers are required to maintain in a clearly visible and legible manner to the customer. A money changer may offer a net rate of exchange that is not shown on the board if the offered rate is more favourable to a customer.
For more advice, consumers may refer to the report in this current (June) issue of CHOICE.
The Consumer Council reserves all its right (including copyright) in respect of CHOICE magazine and Online CHOICE (https://echoice.consumer.org.hk/).
- 2014.06.16