RSSFalsely advertising the speed or cost of sending remittance transfers can violate federal law, according to a March 27 circular from the Consumer Financial Protection Bureau.
Remittance companies are allegedly making false claims about the speed of transfers and charging junk fees on international money transfers. According to the CFPB, remittance companies have falsely marketed their services as no-fee or free to consumers when they do charge transfer fees. In other instances, companies can violate the law by failing to clarify their promotional pricing advertising is limited or temporary in scope. It can also be deceptive for digital wallet transfers to be marketed as free if providers charge to convert funds into a different category or withdraw funds.
“It may also be deceptive to market international money transfers as free if the provider is imposing costs on consumers through the exchange rate spread,” according to the CFPB.
The guidance covers both international money transfer providers and digital wallets offering the option of international money transfers from the United States.
Last October, the CFPB fined fintech Chime $3 million for making misleading statements in advertising the cost and speed of its services. Also last year, the CFPB fined Servicio UniTeller $700,000 after finding the international remittance company failed to refund customers after making money transfer errors.
“Consumers should not be paying junk fees on international money transfers that are advertised as free,” said CFPB Director Rohit Chopra. “The CFPB will continue to work with law enforcement to ensure companies don’t illegally burden families with fees or inflated exchange rates using false or misleading claims.”
