Sendwave App Operator Fined and Ordered to Refund Consumers

Published 7 months ago

The operator of the Sendwave remittance app, Chime, has been penalized by the Consumer Financial Protection Bureau (CFPB). The CFPB imposed a $1.5 million fine on Chime for misleading users about the costs and speed of international transfers.

Misleading Claims About Remittance Services

Sendwave facilitates international money transfers, primarily to countries in Africa and Asia. Users can send money to recipients’ mobile wallets, bank accounts, or for in-person cash pick-up. Chime, which is not affiliated with Chime Financial, was found to have made deceptive claims about its service.

According to the CFPB, Chime used social media platforms to falsely inform consumers that Sendwave remittance transfers would be delivered “instantly”, “in 30 seconds”, or “within seconds”. Chime also falsely claimed that remittances from the US to Nigeria would incur “no fees”, when in reality fees were incurred.

Protection Against Consumer Losses

Additionally, Sendwave users were obligated to sign a “remittance services agreement”, which shielded Chime from being responsible for any losses the consumer might experience while using the app. CFPB Director Rohit Chopra stated, “Sendwave put illegal fine print into their contracts and tricked people who were sending money to their family overseas.”

Chime and WorldRemit Acquisition

Chime was acquired by WorldRemit in 2020. Both businesses were subsequently incorporated under a new company, Zepz. The company had plans to go public in the US at a valuation of up to $6 billion, but these plans were postponed due to “accounting difficulties” in verifying accounts.

In response to the CFPB’s actions, Chime has been ordered to refund nearly $1.5 million in fees to affected consumers. The actions taken by the CFPB are part of its commitment to monitoring companies launching mobile payment transfer apps, to prevent them from gaining an unfair advantage over their law-abiding competitors.