Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) is taking action against Choice Money Transfer (Choice Money) for multiple violations of the Remittance Transfer Rule and the Electronic Fund Transfer Act (EFTA). The CFPB found the company did not accurately disclose important prepayment information to remittance senders, such as money transfer fees, current exchange rates and the date the recipient would receive the funds. The company also had deficient recordkeeping practices that made it difficult for consumers to dispute erroneous transactions and receive a refund of certain fees. The CFPB is ordering Choice Money to pay a $950,000 penalty that will be deposited into the CFPB’s victims relief fund.
“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.”
Choice Money (doing business as Small World Money Transfer) is a nonbank remittance provider incorporated in New York and headquartered in Englewood Cliffs, N.J. Choice Money is a subsidiary of United Kingdom-based Small World Financial Services Group Limited. Choice Money is licensed in 27 states and the District of Columbia, operates a nationwide network of over 2,000 agents, and transmits money to over 90 countries. Choice Money currently handles approximately 500,000 transfers a month.
Americans send billions of dollars in remittances, typically to family or other loved ones living abroad. These remittance transfers provide a vital service to consumers, allowing them to send critical resources to friends and family.
Following a 2020 examination of Choice Money, the CFPB opened an investigation to determine if the company violated the Remittance Transfer Rule. The rule covers all electronic fund transfers, and requires certain disclosures be provided to consumers who use ATMs or send funds electronically. The CFPB’s investigation found Choice Money had committed multiple violations of EFTA and Regulation E, including the Remittance Transfer Rule since the rule’s inception. The company also violated the Consumer Financial Protection Act through the Regulation E and Remittance Transfer Rule violations.
Specifically, the CFPB found Choice Money:
- Provided inaccurate information to consumers about key transfer information: Choice Money repeatedly neglected to provide accurate fee information as required by law, including the current exchange rate and transfer fee costs added on to the remittance. The company also failed to accurately disclose the date by which funds would be available to the recipient.
- Failed to provide refunds required by law: Choice Money was required by law to provide refunds for certain fees to consumers when “received by” dates were not met, but it repeatedly did not refund consumers for such delayed transfers.
- Used inadequate disclosures: Choice Money did not use specific payment terms on their prepayment disclosures, used an improper size of font in their disclosures, and failed to provide disclosures in both English and Spanish.
- Ignored consumer consent: The company did not abide by the rule’s consumer consent requirements, and included an improper waiver of consumer rights in its disclosures.
Choice Money also did not maintain proper company policies and procedures, nor did the company retain evidence demonstrating compliance with error resolution requirements. The company’s inadequate recordkeeping practices gave the CFPB an incomplete view into the business’s practices.
Under the Consumer Financial Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws, including the Electronic Fund Transfer Act and its implementing Regulation E, including the Remittance Transfer Rule. The CFPB’s investigation found that the company violated multiple provisions of Regulation E, including the Remittance Transfer Rule and the Electronic Fund Transfer Act.
The order requires Choice Money to provide the following:
- Broad corrective action: Choice Money must implement a wide-ranging set of compliance provisions to improve its policies and procedures, error resolution practices, record retention, compliance management, trainings, and audit and monitoring functions.
- Pay $950,000 in fines: Choice Money Transfer must pay a $950,000 penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.
Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees of companies who they believe their company has violated federal consumer financial laws are encouraged to send information about what they know to firstname.lastname@example.org.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.