The Consumer Financial Protection Bureau (CFPB) has issued an order against Servicio UniTeller, an international remittance company, for multiple violations of the requirements governing electronic money transfers, including failing to refund customers after the company made money transfer errors.
The CFPB found Servicio UniTeller failed to comply with many Electronic Fund Transfer Act requirements, including failing to provide accurate disclosures to senders. The agency order requires Servicio UniTeller to bring its business practices into compliance with the law, to reimburse harmed consumers, and to pay a $700,000 penalty.
“Consumers paid fees to Servicio UniTeller when they sent money to their families overseas, but when the money did not arrive on time, Servicio UniTeller failed to provide appropriate refunds,” said CFPB Director Rohit Chopra. “The CFPB and state regulators are carefully watching remittance providers to ensure they follow the law.”
Servicio UniTeller is a nonbank remittance transfer provider, headquartered in Rochelle Park, New Jersey. Servicio UniTeller is a subsidiary of Grupo Financiero Banorte (OTCMKTS:GBOOY). Servicio UniTeller provides international money transfers, including remittance transfers, to consumers in 48 states and the District of Columbia, and it has payment locations in over 70 foreign countries. People in the U.S. send tens of billions of dollars in remittances every year – typically to family or other loved ones living abroad.
The CFPB found that between 2013 and 2021, Servicio UniTeller repeatedly failed to comply with the Electronic Fund Transfer Act and requirements under its Remittance Transfer Rule (a subpart of Regulation E) related to error resolution, customer disclosures, policy and procedure, and document retention. The CFPB also found that, in thousands of instances, Servicio UniTeller failed to timely refund certain fees to senders. Specifically, the company harmed consumers by:
- Failing to provide refunds required by law: In thousands of transactions, Servicio UniTeller did not refund fees when a sender properly submitted an error notice, substantiated by Servicio UniTeller, that the recipient of the remittance transfer was unable to access the funds by the promised date.
- Providing inaccurate disclosure information to customers: Servicio UniTeller neither accurately informed senders of their cancellation rights nor accurately disclosed the date funds would be available. It also inaccurately described key terms of the remittance transfer. Additionally, the company’s disclosures did not meet minimum font size requirements.
Servicio UniTeller also failed to develop and maintain sufficient written error-resolution policies and procedures, as well as failed to retain evidence showing its compliance with the Electronic Fund Transfer Act and its Remittance Transfer Rule, the agency said.