Two money transfer companies settled CFPB charges for failing to comply with error resolution and disclosure requirements under the Electronic Fund Transfer Act ("EFTA") and Subpart B to Regulation E (a/k/a the "Remittance Transfer Rule").
In a Consent Order, the CFPB stated that a money transfer company failed to accept valid requests for (i) the cancellation of a transfer via telephone and (ii) the refund of a transfer. The CFPB found that the company did not provide customers with (i) proper disclosures of the delivery dates and associated fees or (ii) a statement outlining the rights of a sender, in violation of the Remittance Transfer Rule. The CFPB determined that the company misled its customers regarding the timeline for submitting error notices and misrepresented the services it offered. To settle the charges, the company agreed to (i) pay a $1.6 million penalty and (ii) adopt an adequate compliance plan, should it continue offering remittance transfers.
In a separate Consent Order, the CFPB stated that a second remittance transfer company failed to refund fees to senders who asked to resend their transactions. The CFPB found that the company did not provide customers involved in error investigations with written explanations of the company's findings. Additionally, the CFPB stated that the company's prepayment disclosures were inadequate. To settle the charges, the company agreed to (i) a $300,000 penalty and (ii) $100,000 in consumer redress. The company also agreed to implement written policies to ensure compliance with the Remittance Transfer Rule.
The CFPB stated that these settlements are reflective of a "sweep" of enforcement actions that address Remittance Transfer Rule violations.
Commentary Rachel Rodman
The CFPB's enforcement office has been very active of late, rolling out consent orders with mortgage originators, a large bank regarding overdraft sales practices, and now remittance providers. These two settlements put remittance providers and money transmitters on notice that the CFPB will enforce the technical requirements of EFTA and Regulation E.
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