Money transfer platform Wise has been hit with a $2.5 million penalty from the Consumer Financial Protection Bureau (CFPB) for misleading customers about fees and charges.
London-headquartered Wise illegally advertised inaccurate fees and failed to properly disclose exchange rates and other costs, says the CFPB.
In multiple emails and blogs to its customers around the globe, Wise announced lower ATM fees, free withdrawals, and other customer perks. "Wise led customers in the US to believe these perks applied to them, when they, in fact, did not," according to the CFPB.
In addition, the firm failed to disclose accurate fees to consumers who funded prepaid accounts using a credit card through Apple Pay or Google Pay; failed to properly disclose exchange rates; and failed to refund fees when funds were not available to the recipient by the date of availability.
The CFPB has ordered Wise to pay $450,000 to harmed customers and another $2.025 to the regulator's victims relief fund.
“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” says CFPB Director Rohit Chopra. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”