Apparently, when people transfer money to relatives outside the U.S., they are dinged by hidden fees. The result is that those family members get less than expected.
The Consumer Financial Protection Bureau today adopted a rule that generally will require money transfer providers to disclose all the fees and the exchange rate upfront. And these providers are going to have to investigate disputes and fix errors.
“With these new protections, international money transfers will be more reliable. Consumers will know the costs ahead of time and be able to compare prices,” said CFPB director, Richard Cordray, in a statement. “Transfer providers will also be held accountable for errors that occur in the process.”
Isn’t it amazing that you could have sent money abroad and not be told the fees?
These money transfers used to be outside the realm of federal regulations. The Dodd-Frank Wall Street Reform Act changed that.
The CFPB’s new rule will require that the fees, exchange rate and how much the recipient will receive must be disclosed ahead of time. After making their payment, consumers will have a half hour to cancel it.
The CFPB is seeking comment online as to whether any adjustments need to be made to the final rule.