On April 21, the CFPB and New York Attorney General’s Office filed a complaint against a remittance provider alleging that the provider (i) repeatedly gave senders inaccurate information about when their remittance transfers would be available to recipients abroad; (ii) repeatedly failed to provide the investigations, responses, or remedies required when consumers complained of remittance-transfer errors; and (iii) failed to comply with policy-and-procedure and document-retention requirements. The complaint also alleges that the company engaged in unfair acts and practices by failing to timely make remittance transfers available to recipients or to timely make refunds available to senders. The complaint alleges that the these actions violated the Electronic Funds Transfer Act and its implementing Regulation E and the Remittance Rule and the Consumer Financial Protection Act, among various consumer financial protection laws.
Notably, the CFPB’s announcement refers to the provider as a “repeat offender” citing to a $125 million settlement with the FTC for the company’s failure to implement a comprehensive anti-fraud and agent-monitoring program under a previous consent order. The CFPB also cites to previous agreement to forfeit $100 million and enter into a deferred prosecution agreement with the DOJ, admitting it “criminally aided and abetted wire fraud and failed to maintain an effective anti-money laundering program.”
Putting It Into Practice: This the CFPB’s second such lawsuit this month holding repeat offenders accountable (we discussed the first lawsuit in a blog post here). This latest lawsuit should alert companies that the CFPB is looking for noncompliance not only with its prior consent order, but also orders from other agencies. Companies should also confirm and document their compliance with ongoing consent order stipulations.