WASHINGTON—The CFPB’s latest monthly complaint snapshot highlights consumer complaints about money transfers, and further reveals consumers continue to experience issues when attempting to resolve problems with disputed transactions.
Every year, tens of billions of dollars are sent both domestically and abroad through money transfer services, noted the CFPB. As of Sept. 1, 2016, the Bureau said it had handled approximately 6,900 money transfer complaints. Some of the findings in the snapshot include:
- Consumers struggle to access funds: Consumers complained of holds being placed on their accounts by money transfer service providers without an explanation. While money transfer service providers report that holds are the result of using a risk-based model that will hold reserves or chargebacks, consumers operating small businesses indicate that these holds harm their ability to conduct routine business operations and impact their financial lives more broadly, the CFPB said.
- Consumers report problems resolving errors: Consumers attempting to complete transactions through an online money transfer service often report encountering problems with the dispute resolution process. “Sellers describe several scenarios where they do not receive payments after sending the item to the buyer. This often occurs when the seller is told that the payment has been accepted but is later cancelled. Cancellation is done either by the buyer directly due to a dispute, or by their financial institution due to insufficient funds in the buyer’s account. Sellers often indicate money transfer service providers will debit a seller's account without guaranteeing that the buyer will return the item to the seller,” the Bureau explained.
- Consumers report being victims of fraud: Forty-one percent of money transfer complaints were related to being victims of fraud. A common complaint submitted by consumers is that they send money to a seller but do not receive the items they purchased in return.
The Monthly Complaint Report can be found at: http://files.consumerfinance.gov/f/documents/092016_cfpb_MonthlyComplaintReportVol15.pdf