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Elevate Magazine
February 1, 2025

Fintech Company Wise Hit With Major Fine for Misleading Customers

fintech company wise hit with major fine for misleading customers
Photo source: Business Wire

The Consumer Financial Protection Bureau (CFPB) has imposed a fine of approximately $2.5 million on the remittance service provider Wise, based in the United Kingdom, for what it describes as “a series of illegal actions.”

The CFPB’s allegations include the promotion of misleading fees and a failure to adequately disclose exchange rates and other associated costs. Specifically, the agency asserts that Wise misrepresented its ATM fees to U.S. customers and neglected to disclose additional fees appropriately.

Furthermore, the CFPB claims that Wise did not refund remittance fees in a timely manner when transactions were delayed, resulting in “hundreds of thousands of dollars” in consumer harm.

As part of the penalty, Wise is required to pay around $450,000 in restitution to affected consumers along with a civil penalty of $2.025 million.

“By deceiving customers, Wise gave itself an unfair advantage over other competitors in the remittances market,” stated CFPB Director Rohit Chopra in an official release. “New technology can help make money transfers cheaper and more convenient, but companies must be truthful and live up to longstanding law.”

The CFPB later identified specific issues in February 2022 that Wise acknowledged as areas needing improvement. The company stated that it had “proactively and voluntarily compensated” affected customers, totaling $450,000, and emphasised its cooperation with the CFPB throughout the investigation, resolving most issues by November 2022.

Wise also noted that it reached an agreement with the Bureau on January 30.

“At Wise, we continuously invest in our compliance program and processes to ensure we maintain a robust framework, including in the U.S., where we have strengthened our teams and built substantial tooling,” the company stated.

Wise operates in the United States through its wholly owned subsidiary, Wise US, and has recently announced plans to expand its services into Mexico.