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The Consumer Financial Protection Bureau (CFPB) has imposed a $1.5 million penalty on Chime, the operator of the remittance app Sendwave, for misleading users regarding the costs and speed of international transfers. Chime, unrelated to Chime Financial, has also been instructed to refund nearly $1.5 million in fees to affected consumers.
Sendwave is an app that enables users to send money internationally, primarily to countries in Africa and Asia. Recipients can receive transfers through mobile wallets, bank accounts, or in-person cash pick-ups.
The CFPB alleges that Chime used deceptive marketing on social media platforms to claim that Sendwave remittance transfers would be delivered “instantly,” in “30 seconds,” or “within seconds.” The company also falsely stated that remittances from the US to Nigeria would have “no fees,” even though fees were indeed charged.
Furthermore, Sendwave users were required to sign a “remittance services agreement,” which shielded Chime from responsibility for any losses incurred by consumers when using the app.
CFPB Director Rohit Chopra stated, “Sendwave put illegal fine print into their contracts and tricked people who were sending money to their family overseas. The CFPB is closely monitoring companies that launch mobile payment transfer apps to ensure they do not gain an unfair advantage over law-abiding competitors.”
Chime was acquired by WorldRemit in 2020, and the two businesses were subsequently consolidated under the umbrella of a new entity called Zepz.
The company had planned to go public in the US last year with a valuation of up to $6 billion but postponed those plans while addressing “accounting difficulties” related to checking and verifying accounts, as reported by Bloomberg.
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