On January 30, 2025, the CFPB issued an order against a remittance company for misleading consumers about fees and failing to provide accurate disclosures, harming consumers who relied on the company's representations when sending money to family and friends. The Bureau alleges the company's conduct violated of the Consumer Financial Protection Act's (CFPA) prohibition on unfair, deceptive, or abusive acts or practices and the Electronic Fund Transfer Act's (EFTA) fee disclosure requirements for prepaid accounts
The CFPB alleges that the company engaged in a series of deceptive practices, including:
- Misleading Advertising. The company allegedly sent emails and blog posts to customers advertising lower ATM fees and free withdrawals that were not available to U.S. customers.
- Inaccurate Disclosures. The CFPB alleges the company failed to accurately disclose fees for consumers funding accounts using mobile payment methods, failed to properly disclose exchange rates, and failed to make other required disclosures.
- Failure to Provide Timely Refunds. The company allegedly failed to refund fees when funds were not available to the recipient by the date of availability in violation of Regulation E, 12 C.F.R. § 1005.33(c)(2)(ii).
The company will be required to pay $2.025 million to the CFPB's victims relief fund and pay $450,000 in redress to impacted consumers.
Putting It Into Practice: It remains to be seen how a potential change in CFPB leadership will affect federal regulators' EFTA enforcement and scrutiny. Financial institutions should nonetheless monitor these developments and review their compliance procedures related to fee disclosures and remittance.
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