Consumer Financial Protection Bureau Fines Wise for Deceptive Remittance Practices

The Consumer Financial Protection Bureau (CFPB) has imposed a fine of approximately $2.025 million on UK-based remittance company Wise for engaging in "a series of illegal actions" related to its remittance services.

Allegations Against Wise

The CFPB alleges that Wise misled customers in the United States about its ATM fees and failed to properly disclose other fees. Specifically, the agency claims that Wise failed to refund remittance fees in a timely manner when people sent money that did not arrive on time, resulting in "hundreds of thousands of dollars" in harm to consumers.

Redress and Civil Money Penalty

The CFPB has ordered Wise to pay approximately $450,000 in redress to harmed consumers and a $2.025 million civil money penalty. This fine is in addition to the $25 million fine imposed by the CFPB in 2022 for similar practices.

Statement from CFPB Director Rohit Chopra

"By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market," said CFPB Director Rohit Chopra in a written statement. "New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law."

Wise’s Response

Wise, which does business in the US through a wholly owned subsidiary, Wise US, recently announced an expansion into Mexico. In a statement provided to TechCrunch, a Wise spokesperson said that the CFPB conducted a "routine examination" of Wise US Inc. between June 2020 and May 2021 and that the company had "inadvertently been operating in ways the Bureau deemed necessary to address." Wise claims to have "proactively and voluntarily compensated in full" the affected customers a total of $450,000 and to have "cooperated fully with the CFPB and immediately worked to address all identified issues."

Wise’s Compliance Efforts

Wise said that it "continuously invests in our compliance program and processes to ensure we maintain a robust framework, including in the US, where we have strengthened our teams and built substantial tooling." The company reached an agreement with the Bureau on January 30 and stated that it had resolved the majority of the identified issues by November 2022.

Latest Fintech Fine

This is the latest example of fintech companies being fined for deceptive practices. Block, the parent company of Cash App, recently agreed to pay an $80 million fine as part of a settlement related to violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations.

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