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Remittance app Sendwave hit with CFPB penalty

Remittance app Sendwave hit with CFPB penalty

The Consumer Financial Protection Bureau has slapped the operator of remittance app Sendwave with a $1.5 million penalty for deceiving users about the costs and speed of international transfers.

Sendwave operator Chime - unrelated to Chime Financial - has also been ordered to refund affected consumers nearly $1.5 million in fees.

The Sendwave app lets users send money internationally, primarily to countries in Africa and Asia. Recipients receive the transfers by delivery to a mobile wallet, bank account, or in-person cash pick-up.

The CFPB says that Chime’s marketing on social media platforms deceptively told consumers that Sendwave remittance transfers would be delivered “instantly,” in “30 seconds,” or “within seconds”. The firm also told consumers that remittances from the US to Nigeria would incur “no fees” when in fact fees were charged.

In addition, Sendwave users were required to sign a “remittance services agreement,” which protected Chime from being responsible for losses the consumer incurred through use of the app.

“Sendwave put illegal fine print into their contracts and tricked people who were sending money to their family overseas,” says CFPB Director Rohit Chopra. “The CFPB is carefully watching companies launching mobile payment transfer apps seeking to gain an unfair advantage over their law-abiding competitors.”

Chime was acquired by WorldRemit in 2020, with the two businesses later put under the umbrella of a new company, called Zepz.

The firm was seeking to go public in the US last year at a valuation of up to $6 billion but put the plans on ice as it sought to resolve "accounting difficulties" in checking and verifying accounts, according to reporting from Bloomberg.

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