The Consumer Financial Protection Bureau ordered digital remittance provider Wise U.S. Inc. to pay $2.5 million for advertising inaccurate fees and failing to properly disclose exchange rates, a characterization that the company said it disagreed with.
The CFPB said Wednesday that New York-based Wise misled customers by advertising inaccurate ATM fees and failed to refund remittance fees when customers sent money that did not arrive on time. Wise, a London-based fintech, allows customers to send, receive and store remittances through a mobile app, prepaid accounts and debit cards; it has no retail stores.
"By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market," CFPB Director Rohit Chopra said in a press release. "New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law."
The CFPB ordered Wise to reimburse customers $450,000 and pay a $2.025 million fine. Wise said it voluntarily reimbursed the majority of customers in 2022 and cooperated fully with the CFPB's investigation, which began as a routine exam in mid-2020.
A spokesperson for Wise said the company "strongly disagrees with the CFPB's characterization of Wise's conduct" and that the company worked "in good faith to conclude the matter."
The CFPB alleged that Wise sent multiple emails and blogs in 2020 to its customers advertising a new fee structure with lower ATM fees and free withdrawals. But the perks typically did not apply to customers in the U.S., the bureau said. For example, Wise said 80% of customers would pay lower ATM fees and were led to believe they would receive two free withdrawals.
The CFPB also accused the company of making disclosure errors and of failing to disclose accurate fees to consumers who funded prepaid accounts using a credit card through Apple Pay or Google Pay. The CFPB also alleged that the company had failed to properly disclose exchange rates and refund fees when funds were not available to the recipient by the date of availability.
The Wise spokesperson said the CFPB had identified mainly technical issues including making certain materials on the company's website downloadable as PDF files and using four decimal points rather than six when advertising exchange rates.
The CFPB also wanted the company to use different wording on its app such as changing the "Amount We'll Convert" to "Transfer Amount." The spokesperson also said the CFPB wanted customers to have the full disclaimer text available rather than through a hyperlink.
Wise characterized the consumers who were reimbursed as "some U.S. customers [who] saw slightly incorrect fees."
The CFPB said Wise violated the Electronic Fund Transfer Act, the Prepaid Rule and the Remittance Transfer Rule.
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