HIGHLIGHTS:

• The Consumer Financial Protection Bureau ("CFPB") issued a Consent Order against a nonbank fintech Company ("Company") that provides international money transfer services.
• The Company is alleged to have violated the Electronic Fund Transfer Act ("EFTA"), Regulation E, and the Consumer Financial Protection Act ("CFPA") by making false claims about transfer speed and cost, improperly waiving consumer rights, inaccurately disclosing the date of fund availability, and failing to provide an explanation of findings in response to Notices of Error.
• The Company agreed to pay a $1.5 million civil money penalty, provide an additional $1.5 million in redress to affected consumers, and implement a comprehensive compliance plan to ensure compliance with relevant laws and the Consent Order.

CASE SUMMARY:

On October 17, 2023, the CFPB took action against a nonbank fintech Company providing international money transfer services for alleged EFTA, Regulation E, and CFPA violations. The fintech Company operates throughout the United States via its mobile application, facilitating remittance transfers to several countries, primarily in Africa and Asia.

The CFPB alleged a series of deceptive and non-compliant practices resulting in significant violations and penalties. The Company allegedly engaged in deceptive advertising, misleading consumers with claims of "instant" or "within seconds" remittance transfers, in violation of the CFPA, and included service agreement clauses that appeared to waive consumers' EFTA rights, in violation of the EFTA.

The CFPB also alleged that the Company inaccurately disclosed critical information, including the date of fund availability and exchange rates. The Consent Order also asserts that Company's alleged failure to investigate and address consumer-reported errors, as well as broader non-compliance with the Remittance Rule, led to multiple violations of regulatory standards. Notably, the Company allegedly failed to round exchange rates consistently as mandated by the Remittance Rule and provided contact and cancellation information in a manner that did not meet regulatory requirements. Without admitting to these allegations, the Company agreed to pay a $1.5 million penalty, as well as set up a comprehensive compliance plan and provide redress to the affected customers.

RESOURCES:

You can review all of the relevant court filings and press releases at the CFPB's Enforcement page.