On October 4, 2022, the CFPB took action against Choice Money Transfer (Choice Money) for multiple violations of the Remittance Transfer Rule and the Electronic Fund Transfer Act (EFTA), such as failing to accurately disclose important prepayment information to remittance senders. Choice Money is a nonbank remittance provider incorporated in New York and headquartered in New Jersey. It currently handles approximately 500,000 transfers a month.
From CFPB Director Rohit Chopra’s statement:
“Choice Money was required to accurately disclose key information to customers sending remittances, but didn’t. Choice Money also failed to refund certain fees when recipients did not receive their money transfers on time.”
The CFPB examined Choice Money in 2020 which prompted the former to start an investigation for suspected violations of the Remittance Transfer Rule by the company. The Bureau found that Choice Money violated EFTA and Regulation E, as well as the Consumer Financial Protection Act. In particular, Choice Money allegedly:
Provided inaccurate information to consumers about key transfer information, including the current exchange rate, transfer fee costs added on to the remittance and the date by which funds would be available to the recipient;
Failed to provide refunds to consumers when “received by” dates were not met;
Used inadequate disclosures by using vague payment terms, improper font size, and not providing disclosures in both English and Spanish.
According to the consent order, Choice Money also did not maintain proper company policies and procedures, nor retain records of error resolution. The order issued by the CFPB requires Choice Money to:
Implement 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.
Pay $950,000 in fines.
Read the CFPB’s press release here.
The consent order can be found here.