Electronic Fund Transfer Act now provides protections for consumers who send remittance transfers
Knowing your rights can protect you and your loved ones.
In fall 2013, new protections became effective for those who send money to family members outside of the United States. Have you ever heard of a remittance? Federal law defines “remittance transfers” to include electronic money transfers from consumers in the United States through “remittance transfer providers” to people abroad, including friends, family members or businesses. Remittance transfers are commonly known as “international wires,” “international money transfers” or “remittances.”
The Consumer Financial Protect Bureau (CFPB) reports that consumers transfer tens of billions of dollars from the United States to foreign countries each year. These international money transfers were generally not covered by federal consumer protection regulations before the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB says that the Dodd-Frank Act expanded the scope of the Electronic Fund Transfer Act to provide protections for consumers who send remittance transfers. In addition, the CFPB finalized its remittance rule, which implements that statute. The rule took effect on October 28, 2013.
According to the CFPB, consumers who make transfers covered by the new remittance rule will receive a number of new protections, including:
- Free, upfront information about the exchange rate, fees and taxes they will pay.
- Information on the amount to be received.
- The right to cancel most transfers within thirty minutes at no cost.
- 180 days to report errors to the company, the right to an investigation and a remedy for certain types of errors.
- Materials, available in five languages – English, Spanish, Chinese, Tagalog and French-Creole.
The Bureau also has added several new answers about international money transfers and the new protections to Ask CFPB, the Bureau’s online question-and-answer database and its Spanish language website.
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