CFPB Accuses Choice Money Transfer of Violating Remittance Rules

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The Consumer Financial Protection Bureau (CFPB) is taking action against Choice Money Transfer, accusing it of multiple violations of money transfer laws.

The bureau announced a $950,000 penalty against the New Jersey company Tuesday (Oct. 4), saying Choice Money had failed to accurately disclose crucial prepayment information to remittance senders, including money transfer fees, current exchange rates and the date the recipient would receive the funds.

In addition, the company had deficient recordkeeping practices that made it tough for consumers to dispute mistaken transactions and receive refunds on fees, the bureau said.

“Choice Money was required to accurately disclose key information to customers sending remittances, but didn’t,” said CFPB Director Rohit Chopra. “Choice Money also failed to refund certain fees when recipients did not receive their money transfers on time.”

The company, which does business as Small World Money Transfer, is licensed in 27 states and the District of Columbia and transmits money to more than 90 countries.

In addition to the fine, the CFPB said Choice Money must establish a “wide-ranging set of compliance provisions to improve its policies and procedures, error resolution practices, record retention, compliance management, training, and audit and monitoring functions.”

Choice Money was not immediately available for comment Tuesday, but on Monday (Oct. 10), responded with the following comment: “We are pleased to have transparently and collaboratively concluded this matter with the CFPB, which relates to issues found to have occurred before 2021,” said Chris Kawula, managing director of Choice Money Transfer.

“The company acted swiftly and thoroughly addressed the findings identified by the CFPB and, following a change in senior leadership, has since invested in new people, systems and technology to further bolster our operations and compliance functions. Ensuring full disclosure and building trust are the foundations of what we do and who we are,” Kawula said.

Read more: CFPB Boss Racks Up Enforcements as Second Year Begins

PYMNTS reported last week that Chopra has handed down 15 enforcement actions since the start of this year and 19 since his appointment one year ago.

Chopra had already earned a reputation as an aggressive enforcer from his stint at the Federal Trade Commission (FTC) and an earlier position with the CFPB. Part of his goal at the CFPB is to make the agency more friendly to consumers and tougher on financial firms.

See also: CFPB Sues MoneyLion Over Alleged Military Lending Act Violation

Among his other recent actions is the one last month against online lender MoneyLion over its alleged violation of the Military Lending Act.

The CFPB sued MoneyLion and 38 of its subsidiaries for allegedly slapping service members and dependents with illegal charges of more than the 36% rate cap on loans. MoneyLion also allegedly forced customers to join a membership program to access various “low-APR” loans, not letting them end their memberships until the loans were paid off.