The Consumer Financial Protection Bureau, with Rohit Chopra still at the helm, announced an enforcement action yesterday — it’s first under the Trump administration — against international remittance company Wise, requiring it to pay nearly $2.5 million for allegedly deceiving U.S. consumers and violating federal laws governing electronic fund transfers. The CFPB alleges Wise inaccurately advertised ATM fees, failed to properly disclose exchange rates and other charges, and did not promptly refund fees when funds arrived late.
Who is Wise? Wise US serves more than three million customers and provides remittance transfers in 48 states, the District of Columbia, Guam, the U.S. Virgin Islands, and Puerto Rico. The company does not have physical storefronts in the U.S., instead relying on a mobile app and prepaid or debit cards.
Details:
- Inaccurate fee disclosures: According to the CFPB, Wise advertised lower ATM fees and free withdrawals to its U.S. customers when those perks did not actually apply to them. U.S. users, for example, were told they could receive two free withdrawals of slightly more than $200 each, but the free withdrawal limit was really only $100 each.
- Insufficient exchange rate disclosures: Wise allegedly violated the Electronic Fund Transfer Act by failing to provide clear and accurate details regarding the exchange rates it used for certain transactions.
- Late remittance refunds: The CFPB found that when remittances were delayed, Wise did not always refund associated fees within the legally required timeframe.
Enforcement action:
- Redress: Wise must pay approximately $450,000 to consumers who were harmed by the company’s disclosure and fee practices.
- Penalty: Wise will also pay a $2.025 million civil money penalty to the CFPB’s victims relief fund.
- CFPB statement: “By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” said CFPB Director Rohit Chopra.
