WASHINGTON–The CFPB said it has taken action against Choice Money Transfer for “multiple violations” of the Remittance Transfer Rule and the Electronic Fund Transfer Act (EFTA).
The Bureau said it 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, according to the CFPB, which has ordered Choice Money to pay a $950,000 penalty that will be deposited into the CFPB’s victims relief fund.
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. It is a subsidiary of United Kingdom-based Small World Financial Services Group, Ltd. and is licensed in 27 states and the District of Columbia. It 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, the CFPB said.
Investigation Opened
Following a 2020 examination of Choice Money, the CFPB said it opened an investigation to determine if the company violated the Remittance Transfer Rule, finding 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, the CFPB said.
Specific Findings
Specifically, the Bureau reported it found Choice Money:
- Provided inaccurate information to consumers about key transfer information
- 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
- Failed to accurately disclose the date by which funds would be available to the recipient
- Failed to provide refunds required by law
- Used inadequate disclosures
- Ignored consumer consent
- Did not maintain proper company policies and procedures, nor did the company retain evidence demonstrating compliance with error resolution requirements.
What Order Requires
The order requires Choice Money to provide:
- 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.