CFPB cracks down on misleading remittance transfer marketing practices
The Consumer Financial Protection Bureau (CFPB) has issued a stern warning to remittance transfer providers. The agency cautions against deceptive advertising regarding the cost or speed of sending remittance transfers, which could violate federal law. Providers are urged to review their marketing materials and implement stricter policies.
The CFPB's circular highlights several deceptive practices. It is misleading to claim transfers are delivered within a certain time frame when they actually take longer. Similarly, promoting 'no fee' or 'free' marketing transfers is deceptive if consumers are charged. The CFPB also warns against unclear promotional offers, such as temporary or limited-time deals.
The CFPB has observed issues with the transparency and accuracy of these marketing claims. Providers may be liable under the Consumer Financial Protection Act (CFPA) for such deceptions, regardless of compliance with other rules. The agency suggests these practices may violate the CFPA's prohibition of unfair, deceptive, and abusive acts and practices (UDAAPs).
Remittance transfer providers are advised to review and remediate their advertising and marketing materials. They should implement more robust policies to prevent future violations. The CFPB's focus on these issues may indicate increased scrutiny and potential enforcement actions in the future. As of today, there are no publicly available records of German providers being fined for such violations.
