Earlier this month, the Consumer Financial Protection Bureau (CFPB), declared enforcement action against a nonbank international money transfer provider. The organization has been charged with alleged deceptive practices as well as illegal consumer waivers according to a consent order published on October 17.
The company, operating a transfer service through a mobile application, demanded consumers to sign a “remittance services agreement”. This agreement included a clause which stated that the company would not bear any liability for negligence amounting to over $1,000. It’s the apparent violation of the Electronic Fund Transfer Act (EFTA) and the Consumer Financial Protection Act (CFPA) that brought this provider under scrutiny.
The decision from the CFPB results in a civil money penalty against the company, however, there was no explicit mention of the penalty’s amount in the available information. The enforcement action taken by the CFPB marks a further step in its mandate of protecting consumers from deceptive financial practices.
Legal professionals working in corporate settings and law firms ought to carefully monitor and comply with the regulations set forth by the EFTA and CFPA. Non-compliance not only entails financial penalties but, as this case highlights, can also lead to reputational damage. It’s crucial that corporations and legal practitioners remain vigilant and work proactively to ensure that all contractual clauses align with the prevailing regulations.