Money Transfer Blues
The government’s Consumer Financial Protection Bureau (CFPB) has been fielding a lot of consumer complaints about the money transfer industry, and it has compiled a report about the most common ones.
Money transfer is a service that many people resort to in emergencies. Often, it is the only way to get needed emergency funds to a family member or friend quickly.
For many immigrants, money transfer provides a needed financial lifeline for loved ones back home.
So, it’s troubling to see that so many consumers are having problems with these services.
CFPB recently released a report chronicling the most common causes of money transfer problems:
- Consumers victimized by fraud: Of all complaints about money transfers, 42 percent of them involved consumers complaining about being victims of fraud.
- A common fraud tactic mentioned by consumers involves the fraud perpetrator asking for a money transfer in order to provide relief to a family member in need. While this is the most common type of money transfer complaint, it is not targeted at the actual money transfer service being provided.
- Problems transferring money: Consumers complain about problems arising when they try to complete a money transfer. Some consumers complained that the amount of money transmitted was smaller than expected, while others mentioned the money they sent being significantly and unexpectedly delayed.
- Lack of adequate customer service: Many complaints about money transfers centered around problems consumers faced when they contacted the company for help.
- People complained about long hold times when attempting to speak to a representative, and that when they did manage to get through to someone, they were provided confusing or inadequate information. Other consumers said when they called they were simply unable to speak to anyone from the company.
- Issues resolving errors: Consumers complain that refunds on money transfers are often subject to long delays, and that their rights in resolving an error are not made clear by the company they are working with.
- Most-complained-about companies: MoneyGram, Western Union, PayPal, and JPMorgan Chase were the four companies about which the CFPB has received the most money transfer complaints.
- Between July 2015 and September 2015, the four companies accounted for 80 percent of all money transfer complaints. Company-level information should be considered in the context of company size and activity in the relevant market.
Company-level complaint data in the report uses a three-month rolling average of complaints sent by the Bureau to companies for response.
This data lags other complaint data in this report by two months to reflect that companies are expected to close all but the most complicated complaints within 60 days.
After the CFPB forwards a company the complaint, the company has 15 days to respond, confirming a commercial relationship with the consumer.
Find out more HERE.
Keep in mind that your credit union can usually provide you with safe, effective ways to get money to a loved one fast, at reasonable cost. You don’t necessarily need to resort to one of these money transfer companies.
Copyright Today’s Credit Unions