CFPB moves to stop “free” international money transfer claims

On Wednesday, the Consumer Financial Protection Bureau (CFPB) warned that false claims about the cost or speed of sending international money transfers can violate federal law.

The CFPB said some companies are charging junk fees on international money transfers and making false claims about how quickly those transfers can occur. In a new circular, the agency warned about several marketing practices relating to international money transfers that may violate the Consumer Financial Protection Act. The warning applies to both the traditional providers of international money transfers and to “digital wallets.”

“Consumers should not be paying junk fees on international money transfers that are advertised as free,” CFPB Director Rohit Chopra said. “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.”

Every year, the agency said, U.S. consumers send tens of billions of dollars in international remittances to family and friends living abroad or to Americans living abroad temporarily. The agency’s circular pointed out that some remittance providers falsely market their services as “free” or “no fee” when they are not free; some providers may bury their promotional conditions in the fine print; and others may deceptively advertise how long the transfers will take when they actually take longer.

The CFPB administers and enforces the Remittance Rule under the Electronic Funds Transfer Act, and the Consumer Financial Protection Act, and remittance providers may be liable for deceptive marketing practices under those rules regardless of whether the provider is in compliance with disclosure requirements, the agency said.

The post CFPB moves to stop “free” international money transfer claims appeared first on Financial Regulation News .