People living in the United States often use mobile transfer apps to send money to family or loved ones living abroad. One of those apps, Chime Sendwave, has totaled more than $1 billion in money transfers each year.
That was a red flag to the Consumer Financial Protection Bureau, and it’s why they’re stepping in. They say the mobile app has deceived consumers about the cost and speed of international money transfers by requiring consumers to waive their rights and protections.
“There’s a remittance rule in effect that provides consumers with protections in this very industry,” Michael Favretto, assistant deputy enforcement director at CFPB told WTOP.
The CFPB said the Chime Sendwave app promised an instant delivery of funds, or at least within 30 seconds, when in many cases, the transfer took much longer. And in some cases, the app said there would be no fee to transfer money, then charged consumers nonetheless.
“It’s ripe for abuse and it’s ripe for deception,” he said.
Consumer attorney Ira Rheingold, the executive director of the National Association of Consumer Advocates, says the app often targets immigrants or those who speak English as a second language.
“This is targeting immigrants. So, you’re dealing with people who are relatively new to this country. Maybe even less aware of their rights and may not be completely English proficient,” Rheingold said. “What’s interesting about this case is because of the existence of the Electronic Fund Transfer Act, there [are] certain rights that cannot be waived. They tried to limit what their liability was.”
The CFPB also said Sendwave failed to provide consumers with legally required disclosures and receipts while not properly investigating consumer disputes and is ordering Chime to give $1.5 million in refunds and pay a $1.5 million penalty into the CFPB’s victim relief fund.
“We are focused on this market, making sure, the players in the market are abiding by the law,” Favretto said. “If consumers have run into issues in sending international remittances, I would encourage them to submit a complaint to the CFPB.”
Surce: WTop News