Wise ordered to pay $2.5 million for misleading customers of its money transfer service

Wise fined $2.5 million by the CFPB for misleading customers ot its fund transfer service about ATM fees, exchange rates and other charges. Image (c) ConsumerAffairs

The company misled customers about ATM fees, exchange rates and other charges

The Consumer Financial Protection Bureau (CFPB) has ordered Wise, a global remittance company, to pay nearly $2.5 million for several violations, including deceptive advertising and failure to disclose accurate fees.

Wise, which offers international money transfer services through a mobile app and prepaid accounts, was found to have misled U.S. customers regarding ATM fees, exchange rates, and other charges.

Wise, headquartered in the UK, operates in the U.S. through Wise US, a nonbank remittance provider. The company provides services such as money transfers and prepaid accounts to over three million U.S. customers. Wise markets its services via a mobile app, and customers can also use prepaid debit cards to store and send money across borders.

However, the CFPB's investigation uncovered a series of misleading actions by Wise, leading to harm for hundreds of thousands of consumers.

One of the main violations identified by the CFPB involved Wise advertising inaccurate ATM fees and perks to U.S. customers. Wise had sent multiple communications to its customers, claiming lower fees and free withdrawals. The company advertised that 80% of its customers would experience lower ATM fees, but this benefit largely did not apply to U.S. consumers.

Additionally, U.S. customers were led to believe they would receive two free withdrawals of over $200 each, but in reality, the withdrawals were capped at $100 each.

Furthermore, the CFPB said, Wise failed to disclose accurate fees when consumers funded their prepaid accounts through credit cards using Apple Pay or Google Pay. The company also failed to properly disclose exchange rates and did not refund fees when funds were delayed and not available to recipients on time. 

As a result of these violations, the CFPB has required Wise to pay $450,000 in redress to harmed consumers, with the funds being distributed to those who lost money due to the company's deceptive practices. Additionally, Wise has been fined $2.025 million, which will be paid into the CFPB’s victims' relief fund.