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The Consumer Financial Protection Bureau (CFPB) has imposed a fine of approximately $2 million on the U.K.-based remittance company Wise for engaging in what it described as “a series of illegal actions.” These actions, as alleged by the CFPB, include advertising inaccurate fees, failing to properly disclose exchange rates and other costs, misleading customers in the United States about ATM fees, and not refunding remittance fees in a timely manner when money did not arrive on time. The CFPB has ordered Wise to pay about $450,000 in redress to harmed consumers and a $2.025 million civil money penalty.
Compliance Issues Highlighted by CFPB
During a routine examination conducted between June 2020 and May 2021, the CFPB identified certain compliance issues with Wise US Inc., a wholly owned subsidiary of Wise operating in the U.S. Wise spokesperson stated that the company proactively compensated affected customers in full, cooperated fully with the CFPB, and resolved the majority of identified issues by November 2022. An agreement was reached with the Bureau on January 30, and Wise emphasized its commitment to continuously investing in compliance programs and processes.
Fintech Industry Facing Regulatory Scrutiny
The case involving Wise is part of a broader trend where fintech companies are facing fines for deceptive practices. For instance, Block, the parent company of Cash App, recently agreed to pay an $80 million fine related to violations of the Bank Secrecy Act and anti-money laundering regulations. This highlights the importance of adhering to regulations and ensuring transparency in financial services.
Overall, the enforcement actions against Wise and other fintech companies underscore the need for companies to operate within the bounds of the law and maintain robust compliance frameworks to protect consumers and uphold the integrity of the financial system.
