The Consumer Financial Protection Bureau (CFPB) has imposed a $1.5 million penalty on Sendwave’s operator, Chime, for misleading users regarding the costs and speed of international money transfers.
Chime, which is not connected to Chime Financial, is also required to refund nearly $1.5 million in fees to affected consumers. The Sendwave app enables users to send money internationally, primarily targeting recipients in Africa and Asia through mobile wallets, bank accounts, or cash pick-up services.
The CFPB found that Chime misrepresented its services on social media, claiming that Sendwave transfers would arrive “instantly,” in “30 seconds,” or “within seconds.” Furthermore, the company falsely informed consumers that remittances from the US to Nigeria would incur “no fees,” when, in reality, fees were applied.
Additionally, Sendwave users were obligated to sign a “remittance services agreement,” which shielded Chime from liability for any losses incurred through the app’s use.
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 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, and both companies were later integrated into a new entity called Zepz. In 2022, Zepz planned to go public in the US with a valuation of up to $6 billion, but those plans were delayed as the company addressed “accounting difficulties” related to account verification.