January 15, 2016

Money Transfer Service Complaints Under the CFPB Spotlight

2 min

Of the over 770,100 complaints the CFPB has handled (as of December 1, 2015), 5,100 dealt with domestic and international money transfer issues. The most common sources of money transfer complaints stem from allegations of:

  • Fraud: The CFPB notes that 42% of money transfer complaints dealt with fraudulent transfer requests.
  • Customer service issues: Consumers complained of difficulty in contacting money transfer companies, and felt that they were provided confusing or inadequate information when they did get through.
  • Error resolution problems: Consumers indicated that it was often difficult to resolve errors and that refunds were delayed. Consumers often submit complaints because the transfer recipients did not receive the money transfer, because the amount received was smaller than expected, or because of significant and unanticipated delays.
  • Issues with international transfers: Consumers mentioned problems with the transfer amount, transfer fees and taxes, and exchange rates. Specific complaints included that remittance transfer providers charge consumers an exchange rate higher than that reported in major newspapers or that the funds were not received in the same currency in which the transfer was funded.

National Overview:

Across all consumer financial products, the CFPB Snapshot shows that for November 2015, the two most complained-about financial products were debt collection and mortgages (comprising 49% of all complaints). Overall, the CFPB noted a 12% decrease in total complaint volume.

Product Trends:

The report states that debt collection, mortgage, and credit reporting complaints "continue to be the top three most complained-about consumer financial products and services," representing about 68% of complaints submitted in November 2015. The CFPB noted an increase in the number of complaints involving prepaid products (215%), as compared to the same period in 2014, while complaints regarding payday loan companies decreased (14%).

Geographic Spotlight:

The report also chose Georgia and the Atlanta metro area for this month's geographic spotlight. The complaint profile and volume for this geographic region are similar to those of the rest of the nation—mortgages are the most complained-about product in the region, although they are trending at a slightly higher rate than that for consumers nationally.