Choice Money Faces Nearly $1 Million Fine from Consumer Bureau

Nonbank payment service failed to disclose fees and exchange rates, leaving consumers confused and accounts underfunded

The Consumer Financial Protection Bureau (CFPB) has announced it is taking action against payment/remittance provider Choice Money - known to consumers as Small World Money Transfer - for the company's failure to provide accurate information on fees, exchange rates, and arrival time of funds.

The action against Choice Money includes a fine of $950,000. Choice will also be required to take broad corrective action. Failure to comply could result in additional fines or other penalties.

“Choice Money was required to accurately disclose key information to customers sending remittances, but didn’t,” said CFPB Director Rohit Chopra. “Choice Money also failed to refund certain fees when recipients did not receive their money transfers on time.”

Following the receipt of complaints about Choice Money's practices, the CFPB began investigating the company in 2020. That investigation found that Choice Money violated relevant laws on payments and remittances, including that Choice Money:

• Provided inaccurate information to consumers about key transfer information: Choice Money repeatedly neglected to provide accurate fee information as required by law, including the current exchange rate and transfer fee costs added on to the remittance. The company also failed to accurately disclose the date by which funds would be available to the recipient.
• Failed to provide refunds required by law: Choice Money was required by law to provide refunds for certain fees to consumers when “received by” dates were not met, but it repeatedly did not refund consumers for such delayed transfers.
• Used inadequate disclosures: Choice Money did not use specific payment terms on their prepayment disclosures, used an improper size of font in their disclosures, and failed to provide disclosures in both English and Spanish.
• Ignored consumer consent: The company did not abide by the rule’s consumer consent requirements, and included an improper waiver of consumer rights in its disclosures.

Alistair MacRobert/Unsplash