Chime money transfer overview:
- Who: Chime Inc. was fined nearly $3 million related to remittance transfers on its Sendwave app by the Consumer Financial Protection Bureau (CFPB).
- Why: Chime violated the Electronic Fund Transfer Act by making customers sign away rights, not following required procedures and making false and misleading claims about the timing and cost of transfers.
- Where: The allegations came from the CFPB’s Washington, D.C., office.
Editor’s note: A previous version of this article included a link to an article about Chime Financial. Chime Financial is separate from the company in this article, which is Chime Inc., and has no relevance to the CFPB’s allegations or actions in this case.
Chime Inc. must pay nearly $3 million for its actions related to remittance transfers through its Sendwave app.
The Consumer Financial Protection Bureau (CFPB) said that Chime violated the Electronic Fund Transfer Act (EFTA) by making customers sign away rights, not following required procedures and making false and misleading claims about the timing and cost of transfers.
“Sendwave put illegal fine print into their contracts and tricked people who were sending money to their family overseas,” CFPB Director Rohit Chopra says. “The CFPB is carefully watching companies launching mobile payment transfer apps seeking to gain an unfair advantage over their law-abiding competitors.”
The EFTA requires that remittance transfer providers clearly disclose both fees and fund availability for transfers along with investigating errors in transfers.
The CFPB says the company made misleading claims about making transfers “instantly,” in “30 seconds,” or “within seconds” along with not being direct about fees involved and not investigating transfer errors.
Chime money transfers from the United States to Nigeria were advertised as taking place “with no fees” during 2021 and 2022 but consumers were charged fees.
Chime Inc. forced to pay nearly $1.5M in CFPB fines, $1.42M in compensation to customers
Chime was ordered to pay $1.3 million to compensate customers who were made to pay fees, $124,000 to customers who were incorrectly told the date fees would be available and a $1.5 million fine to the CFPB.
The allegations also included claims that its Sendwave disclaimer violated EFTA. Sendwave made customers agree to hold the company harmless against lawsuits, claims, judgments, liabilities, losses, costs and expenses before allowing remittance transferred through the app.
In a statement to Top Class Actions, Sendwave says a fair and positive customer experience is central to Sendwave’s product and services and it will ensure that the requirements of the consent order are implemented.
“Sendwave takes its responsibility to customer protection very seriously, working closely with regulatory, financial and consumer protection authorities in the United States and beyond,” the statement says. “To lay even stronger foundations for the future, Sendwave has increased its focus on safeguarding customers while building a fast, reliable and convenient mobile payments transfer app for its growing customer base in the years to come.”
Have you made a remittance transfer using Sendwave? Let us know in the comments.
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554 thoughts onChime Inc. to pay $3M over money transfer deception allegations
I called chime cause some merchent charge three diffrent amounts to my account but chime told me that it was nothing they can do about.