CFPB orders Wise to pay USD 2.5 million fine due to illicit remittance practices


The Consumer Financial Protection Bureau (CFPB) has ordered Wise to pay USD 2.5 million fine due to a series of illicit remittance actions, with the company being accused of misleading customers about fees and failing to offer proper disclosures

The Consumer Financial Protection Bureau (CFPB) has ordered Wise to pay USD 2.5 million fine due to a series of illicit remittance actions, with the company being accused of misleading customers about fees and failing to offer proper disclosures. The fine follows the CFPB’s findings into Wise, with the agency discovering a series of illegal actions conducted by the company, including advertising inaccurate fees and failing to disclose exchange rates and other additional costs.

As part of its offering, Wise enables customers to send, receive, and store remittances via a mobile app and prepaid accounts and debit cards. The CPFB is not the first regulator to keep an eye on the London-listed payments firm, with the National Bank of Belgium (NBB), Wise’s supervisory authority in Europe, conducting a review of the company and finding deficiencies in its AML controls. The 2022 assessment identified gaps in Wise’s compliance practices, including missing proof-of-address documentation for hundreds of thousands of customers.

Following the NBB’s review, Wise submitted a remediation plan that was approved by the authority. Misleading ATM fees and improper disclosure of other charges The CFPB uncovered that Wise misled customers across the US about its ATM fees, as well as did not properly disclose other charges. When individuals sent funds that did not arrive on time, the company failed to refund the remittance fees in the timeframe required by regulations.

The company’s practices led to hundreds of thousands of dollars in harm to consumers. Due to its improper actions, Wise now must pay nearly USD 450,000 in redress to affected consumers and a USD 2.025 million civil money penalty. Furthermore, the CFPB discovered that Wise violated the Consumer Financial Protection Act of 2010 by advertising inaccurate ATM fees to US customers, as well as the company breached the Electronic Fund Transfer Act in several ways, including failing to disclose exchange rates and to refund charges when money was not available to the recipient on time.

Wise's view on the matter In a statement provided to The Paypers, Wise declared its commitment to offering optimised customer experiences. The company mentioned that between June 2020 and May 2021, the CFPB conducted a routine examination on it for compliance with several US laws pertaining to financial providers. Fast forward to February 2022, the agency underlined certain issues where Wise operated in ways it deemed necessary to address, including having certain materials downloadable as PDFs, updating wording choices, displaying exchange rates rounded up to four decimal points instead of 6 decimal points, and having full disclaimer text available in-page rather than through a hyperlink.

Representatives from Wise highlighted that upon receiving the findings, the company proactively compensated in full, totalling USD 450,000 across the affected customers. Moreover, the company underscored its cooperation with the CFPB and working on addressing the identified issues, with the majority of them being resolved by November 2022. Now, Wise reached an agreement with the CFPB to conclude the matter and enable the company to continue focusing on developing its operations and supporting its customers.

Other actions taken by the CFPB Wise is not the first company to face scrutiny from the CFPB in 2025, with the agency recently taking action against Equifax, the national consumer reporting agency, for its inadequate handling of consumer dispute investigations. The CFPB revealed that Equifax disregarded consumer documents and evidence regarding disputes, allowed inaccuracies previously deleted to be reintroduced into credit reports, issued confusing and contradictory letters to consumers related to outcomes of its investigations, and employed defective software code that led to incorrect consumer credit scores. The agency’s order mandated Equifax to adhere to federal law and pay a civil penalty of USD 15 million, which was set to be allocated to the CFPB’s victims’ relief fund.

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Jan 31, 2025 11:22
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