Every year, consumers send tens of billions of dollars through money transfer services, and complaints are on the rise, including cases of fraud and issues with delays and customer service. While the majority of users are satisfied with the best new international money transfer services, a lot of consumers have complaints regarding certain aspects of the services. This is why it’s so important that when you are picking a money transfer service, you check out any reviews and make sure that it is the right one for you. For example, you might prefer using cheaper wire transfers, on the other hand, you might decide that you are happy using whichever company that suits you.
Consumers send funds both abroad and domestically in order to make payments, and to help family and friends pay for living expenses.
In 2013, the Consumer Financial Protection Bureau finalized rules on international money transfers that provided new protections involving disclosures on third-party fees and exchange rates, error resolution, and cancellation rights for consumers sending money.
The Bureau this past week released its latest update on consumer complaints, focusing on money transfers. As of Dec. 1, 2015, the Bureau handled about 5,100 money transfer complaints, which include both domestic and international transfers.
Here are some of the findings:
Fraud: 42 percent of complaints involved consumers being victimized of fraud. A common fraud tactic mentioned by consumers involves the fraudster 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. Dealing with fraud is something that a lot of people have to deal with though when it comes to transferring money. However, there are certain things that have been put in place that can help with this. For example, if you live in India, then you need to sort out your bank code (known as an IFSC code), as this can help you avoid fraud. So before you make any bank transfers, you need to make sure that you have checked my IFSC code. As this can help keep your bank transfer to an Indian account safe.
Problems transferring money: Some consumers complained that the amount of money transmitted was smaller than expected, while others mentioned the money they sent was 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.
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.
To submit a complaint, consumers can go here www.consumerfinance.gov/complaint/; or call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372).