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Remittance transfer providers to pay $2 million in settlement

08/31/2020
Fine Amount: 
$2,000,000
Penalty Type: 
Issued by: 

The CFPB has entered into Settlement Agreements with Trans-Fast Remittance LLC and Sigue Corporation and its subsidiaries, SGS Corporation and GroupEx Corporation. Trans-Fast, which until recently was a remittance transfer provider, is based in New York, New York and licensed in over 30 states. Sigue and its subsidiaries, which are all headquartered in Sylmar, California, provide consumers with international money-transfer services, including remittance-transfer services.

The Bureau found that Trans-Fast and Sigue and its subsidiaries violated the Electronic Fund Transfer Act (EFTA) and the Remittance Transfer Rule, which implements EFTA. The Bureau also found that Trans-Fast violated the Consumer Financial Protection Act of 2010’s (CFPA) prohibition against deceptive acts or practices. The consent orders require the companies to pay civil money penalties and impose requirements to prevent future violations. Sigue and its subsidiaries must also pay consumer redress.

Trans-Fast was found to have violated EFTA and the Remittance Transfer Rule by failing to

  • adhere to error resolution requirements
  • properly respond to cancellation requests
  • provide refunds the Remittance Transfer Rule requires
  • maintain required policies and procedures
  • provide required disclosures

Since the inception of the Remittance Transfer Rule, Trans-Fast provided about 40 million disclosures to consumers that violated the Remittance Transfer Rule. The Bureau also found that Trans-Fast engaged in deceptive acts or practices in violation of the CFPA by making misleading statements in advertisements regarding the speed of its remittance transfers and making misleading statements in disclosures purporting to limit consumers’ error resolution rights.

The consent order against Trans-Fast requires it to pay a $1.6 million civil money penalty. If Trans-Fast resumes offering remittance transfers, the consent order requires it to adopt a compliance plan to ensure that its remittance transfer acts and practices comply with all applicable Federal consumer financial laws and the consent order.

Sigue Corporation and its subsidiaries were found to have failed to:

  • refund transaction fees when they did not make funds available by the disclosed date of availability
  • inform consumers of the remedies available for remittance errors
  • report to consumers in writing the results of their investigations into transaction errors
  • provide notices of consumers’ rights as required by the Rule
  • develop and maintain adequate written policies and procedures designed to ensure compliance with certain Remittance Transfer Rule error-resolution requirements
  • comply with several Remittance Transfer Rule disclosure requirements

The consent order against Sigue and its subsidiaries requires them to pay about $100,000 in consumer redress and a $300,000 civil money penalty. They must also implement and maintain written policies and procedures designed to ensure compliance with the Remittance Transfer Rule and maintain a compliance-management system that is designed to ensure that their operations comply with the Remittance Transfer Rule, including conducting training and oversight of all agents, employees, and service providers, and not violating the Remittance Transfer Rule in the future.

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