On November 14, the CFPB issued a consent order and stipulation against a company and its subsidiaries for allegedly engaging in unfair and abusive practices related to its money-transfer services used by the friends and family of incarcerated individuals. The Bureau found that from January 1, 2019, to January 8, 2023, these practices resulted in the company taking approximately $4.2 million from about 575,000 accounts. The company blocked consumers from sending and receiving money transfers after a chargeback was filed and failed to disclose complete fee schedules for these services, allegedly violating the CFPA.

The CFPB found that the company’s actions, including blocking accounts and not disclosing fee schedules, caused injury to consumers. The company’s failure to inform consumers about varying fees based on deposit amounts, payment methods, and channels prevented consumers from minimizing fees. The CFPB deemed these actions “unfair” under the CFPA.

The consent order prohibits the company from blocking accounts due to chargebacks and retaining unclaimed funds from inactive accounts. The company must also disclose complete fee schedules for money-transfer services and refund affected consumers. The order mandates the company to pay $2 million in redress to affected consumers and a $1 million civil money penalty to the CFPB. The company did not admit or deny any of the findings but consented to the issuance of the order to resolve the matter.