Remittance transfer providers may be held liable for deceptive marketing if they misrepresent to consumers the speed and cost of sending a transfer, the Consumer Financial Protection Bureau said in a new circular. Providers may be liable under the Consumer Financial Protection Act even if they comply with the disclosure requirements of the Remittance Rule, the bureau added.
The CFPB said providers may be engaging in deceptive marketing if they market remittance transfers as being delivered within a certain time frame, when transfers actually take longer to be made available to recipients; market transfers as “no fee” or “free” when the provider charges fees; or market promotional fees or promotional exchange rates for remittance transfers without sufficiently clarifying when an offer is temporary or limited.
“Compliance with the Remittance Rule disclosure requirements does not obviate the obligation to refrain from misleading marketing practices,” the CFPB said. “In particular, remittance transfer providers must ensure their marketing practices do not violate the prohibition of unfair, deceptive or abusive acts or practices in the CFPA.”
