Banking and Finance Law Daily Wrap Up, ENFORCEMENT ACTIONS—CFPB hits Wise with nearly $2.5 million in penalties over remittance practices, (Jan 31, 2025)

By Jeff Williams

The CFPB found that consumers suffered “hundreds of thousands of dollars” in harm to consumers.

The Consumer Financial Protection Bureau has ordered Wise US, Inc., to pay a total of $2.475 million in an enforcement action stemming from the agency’s investigation that found the nonbank remittance company, among other things, advertised inaccurate fees and failed to properly disclose exchange rates and other costs. “By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” CFPB Director Rohit Chopra said in a press release. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”

Wise executed a stipulation and consent to the issuance of a consent order that calls for the company to pay a $2.025 million fine and $449,550.99 to customers affected by its practices. Wise entered the stipulation and consent “without admitting or denying any of the findings of fact or conclusions of law, except that [Wise] admits the facts necessary to establish the Bureau’s jurisdiction over Respondent and the subject matter of this action.”

The CFPB said it determined that Wise’s advertising regarding ATM fees and charges violated the Consumer Financial Protection Act and that the company’s failure to disclose exchange rates and refund fees when funds were not available to recipients on time violated the Electronic Funds Transfer Act. Overall, the CFPB said, Wise’s actions “led to hundreds of thousands of dollars in harm to consumers."

Specifically, Wise used emails and blogs sent to customers around the world to advertise lower ATM fees, free withdrawals, and other benefits. “Wise led customers in the U.S. to believe these perks applied to them, when they, in fact, did not,” the CFPB said.

Among the examples cited in the consent order the agency issued, the CFPB said Wise announced in a blog post that 80 percent of customers would pay lower ATM fees, which was not accurate for U.S. customers. In another example, the CFBB said Wise told customers they would receive free withdrawals of slightly more than $200, then they actually received free withdrawals of $100 each. Wise’s “inaccurate representations about its ATM fees and charges were misleading and deceptive to U.S. consumers, in violation of sections 1031 and 1036 of the CFPA, resulting in [Wise] overcharging thousands of consumers approximately $156,000 in fees,” the consent order said.

Wise also made a numerous errors regarding disclosures to customers, including failing to disclose accurate fees to customers who funded their prepaid accounts using credit cards through Apple Pay or Google Pay, according to the CFPB. In addition to not refunding fees when funds were not made on time, Wise also failed in its disclosures to properly round exchange rates, the CFPB said.

Companies: Wise US, Inc.

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