According to an Oct. 4 CFPB consent order, the enforcement action against Choice Money (doing business as Small World Money Transfer) followed a 2020 CFPB examination. That examination prompted the CFPB to open an investigation to determine if the nonbank remittance provider engaged in violations of the Remittance Transfer Rule, which covers all electronic fund transfers and requires that certain disclosures be provided to consumers who use ATMs or send funds electronically.
The CFPB’s investigation concluded that Choice Money had committed multiple violations of the Electronic Fund Transfer Act (EFTA) and Regulation E, including the Remittance Transfer Rule. It also violated the Consumer Financial Protection Act through the Regulation E and Remittance Transfer Rule violations, the CFPB said.
Compliance Failures
According to the CFPB, Choice Money engaged in the following compliance violations:
- Provided inaccurate information to consumers about key transfer information: Choice Money “repeatedly neglected to provide accurate fee information as required by law, including the current exchange rate and transfer fee costs added on to the remittance,” the CFPB stated. “The company also failed to accurately disclose the date by which funds would be available to the recipient.”
- Failed to provide refunds required by law: By law, Choice Money was required to provide refunds for certain fees to consumers when “received by” dates were not met but “repeatedly failed” to do so.
- Used inadequate disclosures: Choice Money did not use specific payment terms on its prepayment disclosures, used an improper size of font in their disclosures, and failed to provide disclosures in both English and Spanish.
- Ignored consumer consent: The company did not abide by the rule’s consumer consent requirements and included an improper waiver of consumer rights in its disclosures.
“Choice Money also did not maintain proper company policies and procedures, nor did the company retain evidence demonstrating compliance with error resolution requirements,” the CFPB said. “The company’s inadequate recordkeeping practices gave the CFPB an incomplete view into the business’s practices.”
In addition to the $950,000 penalty, the CFPB order further requires Choice Money to “implement a wide-ranging set of compliance provisions to improve its policies and procedures, error resolution practices, record retention, compliance management, trainings, and audit and monitoring functions.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.