CFPB fines money transmitter Maxi for deceiving consumers

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The Consumer Financial Protection Bureau has ordered a Texas money transmitter to pay a $500,000 fine for telling consumers that the company would not be responsible for errors made when sending money to other countries.

The consent order issued Tuesday is the agency’s first enforcement action based on violations of the Remittance Transfer Rule, which implements the Electronic Fund Transfer Act.

The CFPB said that Maxitransfers Corp., an Irving, Tex., provider of remittance services, gave consumers deceptive disclosure forms claiming the company was not responsible for errors.

With each remittance, the company stated: “Maxitransfers Corp. is not responsible for errors made by banks or payment agents, or for any other reasons out of our control.”

The CFPB said in the order that remittance transfer providers “are responsible for errors by their agents.”

Maxitransfers, which processed about 14.5 million remittances from October 2013 to May 2017, did not return a call seeking comment.

The CFPB said the company had no written policies and procedures addressing any requirements of the Remittance Transfer Rule. Its policy consisted of one and a half pages of general information copied directly from the bureau's website, the bureau said.

Maxi also failed to properly report the results of error investigations, to notify consumers of their rights after an investigation of an error and to use specified or substantially similar terms in its remittance disclosures.

The company also failed to treat its international bill-pay services as remittances, and did not provide consumers of these services with all of the consumer disclosures or protections the laws require, the bureau said.

As part of a settlement, Maxi is required to maintain policies and procedures and a compliance-management system that are “reasonably designed to comply with the Remittance Transfer Rule,” the CFPB said. The company also must conduct training and oversight of all agents, employees, and service providers, the bureau said.

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Remittances Money transfers Enforcement actions CFPB