The Consumer Financial Protection Bureau (CFPB) has fined international remittance company Wise nearly $2.5 million for a series of illegal actions, including misleading advertising and failing to properly disclose fees and exchange rates. The company, which enables customers to send, receive, and store money through its mobile app and prepaid accounts, was found to have harmed U.S. consumers by making inaccurate claims about ATM fees and failing to meet disclosure requirements for costs associated with money transfers.
The CFPB’s investigation revealed that Wise had misled its customers in the United States by advertising lower ATM fees and free withdrawals, which were not applicable to U.S.-based users. The company falsely claimed that 80% of customers would benefit from reduced ATM fees, a benefit that largely did not apply to American consumers. Additionally, U.S. customers were led to believe they would be eligible for two free withdrawals of up to $200 each, only to find that the actual benefit was limited to two free withdrawals of up to $100 each.
The financial watchdog also found that Wise failed to disclose important fees and exchange rate information, particularly when customers funded their prepaid accounts via credit card through platforms like Apple Pay or Google Pay. Furthermore, when funds failed to arrive on time, Wise did not issue refunds for the fees as required by law, resulting in significant financial harm to consumers.
As a result of these deceptive practices, the CFPB is requiring Wise to pay approximately $450,000 in restitution to affected customers and an additional $2.025 million in civil penalties. The total of nearly $2.5 million is intended to compensate harmed consumers and to serve as a deterrent against future violations.
“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” said 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.”
Wise, a publicly traded global financial services provider headquartered in the United Kingdom, operates in the U.S. under the name Wise US. The company offers two key products to U.S. consumers: its remittance transfer service through a mobile app and a prepaid account that allows customers to store and transfer money in multiple currencies. Wise also provides a debit card for spending from the prepaid account.
Despite its claims of low-cost, international money transfers, the CFPB’s findings highlight significant gaps in Wise’s consumer protections, particularly for U.S.-based users who rely on the company for international money transfers. The enforcement action emphasizes the CFPB’s role in ensuring that financial companies are held accountable for misleading practices and that consumer rights are properly upheld.
This ruling underscores the CFPB’s commitment to safeguarding consumers in the rapidly evolving digital financial services sector, where technology can often outpace regulatory oversight.
