International remittance company Wise and the Consumer Financial Protection Bureau (CFPB) reached an agreement to settle the regulator’s allegations that the company advertised inaccurate fees and failed to provide consumer disclosures.
The consent order settling the regulator’s charges includes Wise paying about $450,000 to harmed consumers and paying a $2.025 million penalty to the CFPB’s victims relief fund, the regulator said in a Thursday (Jan. 30) press release.
Reached by PYMNTS, Wise said in an emailed statement that it “proactively and voluntarily” paid the $450,000 to consumers before the agreement was reached.
The CFPB said in its press release that it found that Wise violated the Consumer Financial Protection Act of 2010 by advertising inaccurate ATM fees and charges to U.S. customers and that the company violated the Electronic Fund Transfer Act by failing to properly disclose exchange rates, failing to refund fees when funds were not available to the recipient on time, and failing to make other required disclosures.
“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” CFPB Director Rohit Chopra said in the release. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”
Wise said in its emailed statement that it “strongly disagrees” with the CFPB’s characterization of the company’s conduct but worked with the regulator in good faith to conclude the matter.
The company said in the statement that the CFPB conducted a routine examination of Wise between June 2020 and May 2021, that the regulator highlighted certain issues that it deemed necessary to address in February 2022, and that Wise immediately worked to address those issues and resolved most of them by November 2022.
“These were mainly technical issues such as having certain materials downloadable as PDFs, updating wording choices like ‘Amount We’ll Convert’ to ‘Transfer Amount,’ and having full disclaimer text available in-page rather than through a hyperlink,” the statement said. “In limited cases, some U.S. customers saw slightly incorrect fees, which Wise proactively and voluntarily compensated in full, totaling $450,000.”
The CFPB said in December that it is monitoring the consumer financial marketplace to spot companies’ attempts to charge what it called “junk fees” in new ways after the regulator cracked down on older methods.