CFPB warns providers to stop junk fees on international money transfers
- junk fees
- CFPB
To determine the cost of a transaction today, consumers have to conduct a complex calculation multiplying the provider’s exchange rate with the amount they’re transferring, adding fees, and then repeat the same exercise using the real exchange rate on Google, it’s time-consuming and difficult. That’s how so many banks and providers can conceal such significant revenue in exchange rate mark-ups.
Transparent pricing will end hidden fees and potentially help save billions for newly empowered consumers.
Last year, people and businesses around the world lost £187 billions due to hidden inflated exchange rates. According to the World Bank, “the single most important factor leading to high remittance prices is a lack of transparency in the market”.
Reducing remittance costs to 3% by 2030 is a global target under the United Nation’s Sustainable Development Goal (SDG) 10.C. We have a long way to go and it will require policy intervention to get us there.
“Nearly all of my work payments are from overseas in Euros, and I hate to think how much money I have lost through unfavourable exchange rates and hidden charges.”
“Having made or received money transfers to and from family and friends in Sweden I have been directly affected by hidden fees. With my bank, not only is their exchange rate appalling but you also get charged an extra fee for each transaction that you make.”