WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has fined international remittance provider Wise nearly $2.5 million for misleading advertising, failure to disclose fees accurately, and other violations of consumer protection laws. The enforcement action highlights significant breaches impacting thousands of U.S. consumers and underscores the critical role of corporate compliance in the rapidly evolving remittance market.
The CFPB’s investigation found that Wise advertised inaccurate ATM fees, failed to properly disclose exchange rates and fees, and delayed refunds in cases where funds were not delivered to recipients on time. The company’s actions resulted in hundreds of thousands of dollars in consumer harm. Wise will be required to pay $450,000 in redress to affected consumers and a $2.025 million civil money penalty.
“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” said CFPB Director Rohit Chopra. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”
Wise, headquartered in the U.K., operates in the U.S. through its subsidiary Wise US, offering mobile-based remittance services in 48 states and territories, including prepaid accounts and debit cards. With more than three million U.S. customers, the company facilitates international money transfers and provides currency storage options via its mobile app. However, Wise does not operate any physical storefronts in the U.S., relying solely on its digital platform to serve its consumer base.
The CFPB outlined several violations under the Consumer Financial Protection Act and the Electronic Fund Transfer Act. Key findings include that Wise falsely advertised customer benefits, such as lower ATM fees and free withdrawals, which were inapplicable to U.S. customers. Additionally, Wise failed to clearly disclose all fees for prepaid account funding and currency exchange, and did not meet legal requirements for refunding fees when funds were unavailable to intended recipients on time.
The Bureau’s order mandates that Wise compensate harmed consumers for overcharges related to its prepaid card violations and deceptive practices. The enforcement action also highlights the broader risks in the remittance industry of noncompliance with consumer protection laws, particularly given the increasing reliance on digital platforms for cross-border financial transactions.
This case is another example of the CFPB’s efforts to hold financial institutions accountable for their deceptive practices and failure to comply with consumer protection laws. Moreover, it serves as a reminder to all companies operating in the remittance industry to prioritize transparency and fair treatment of consumers.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.