CFPB Orders International Remittance Transfer Company to Pay Almost $2.5 Million Related to its Advertising and Disclosure Practices
On January 30, the CFPB ordered an international remittance transfer company to pay almost $2.5 million ($450,000 in redress and $2.025 million as a civil money penalty) for allegedly violating the Consumer Financial Protection Act (the CFPA) and the Electronic Fund Transfer Act (EFTA). The Bureau found that the company had violated the CFPA by advertising inaccurate ATM fees and other charges. The Bureau also found that the company had violated provisions of EFTA by, for example, not properly disclosing exchange rates and not refunding fees when it failed to make funds timely available.
The company offers U.S. consumers a number of products, including a mobile application that allows consumers to send remittance transfers electronically, and a prepaid account that comes with a debit card on which consumers can store and send money via different currencies. Following a CFPB investigation of its practices, the company consented to the issuance of a consent order in which it neither admitted nor denied the Bureau’s factual findings and legal conclusions, except for the facts necessary to show that the Bureau has jurisdiction over the company.
As to the alleged CFPA violations for deceptive practices, the CFPB found that the company had sent several emails and blog posts to consumers worldwide explaining that it offered perks, such as lower ATM fees and free withdrawals. Although the company had explained that 80% of consumers would be charged lower ATM fees, the Bureau found that few — if any — of those consumers were based in the U.S. and, thus, this advertising deceived U.S. consumers. Additionally, the Bureau found that U.S. consumers were deceived because the company had suggested that consumers would receive two free withdrawals of just over $200 each when, in fact, they received two withdrawals of up to $100 each.
EFTA provides protections for consumers using various electronic banking and financial services, such as debit card transactions, withdrawals, transfers, and deposits. Relevantly, the act requires financial service providers to give detailed information (such as any fees) about electronic transactions and refund fees if money is not made available in a timely manner. As to the alleged EFTA violations, the CFPB found that the company: inaccurately disclosed fees to consumers who funded their prepaid accounts using Apple Pay or Google Pay; did not properly disclose exchange rates; did not refund fees when it failed to make funds timely available; and did not make other required disclosures.
