Consumer Financial Protection Bureau: UniTeller Failed to Refund Users

The Consumer Financial Protection Bureau says money transfer service UniTeller failed to provide customer refunds.

The CFPB has ordered the New Jersey-based company to refund customers $33,000, and pay a $700,000 penalty, the agency said in a Thursday (Dec. 22) news release.

“Consumers paid fees to Servicio UniTeller when they sent money to their families overseas, but when the money did not arrive on time, Servicio UniTeller failed to provide appropriate refunds,” said CFPB Director Rohit Chopra. “The CFPB and state regulators are carefully watching remittance providers to ensure they follow the law.”

A UniTeller employee declined to comment when PYMNTS contacted the company Thursday afternoon. PYMNTS has also contacted UniTeller’s Mexico-based parent Grupo Financiero Banorte for comment.

According to the CFPB, Uniteller between 2013 and 2021 failed to comply with the Electronic Fund Transfer Act by failing to send timely refunds senders. The bureau said the company did not tell customers about their cancellation rights or “accurately disclosed the date funds would be available.”

UniTeller provides international money transfers, including remittances, to consumers in 48 states and the District of Columbia, and it has payment locations in more than 70 countries.

“People in the U.S. send tens of billions of dollars in remittances every year — typically to family or other loved ones living abroad,” the CFPB notes.

And as PYMNTS wrote last month, that means the business of remittances tends to be more resilient than others during tough economic times.

All the same, Zepz CFO Robert Mitchell told PYMNTS that doesn’t mean those companies can stand still or take their eye off competitors or price-conscious customers who are constantly on the lookout for a cheaper or faster alternative.

“For us as a company, we’re always leaning into the product to make sure the user experience is fully enhanced and making sure we’re addressing any sources of customer churn,” Mitchell said, explaining that Zepz is the newly formed overseer of two global cross-border remittance brands WorldRemit and Sendwave.

A recent Zepz hire, Mitchell nonetheless has years of experience thanks to time in financial leadership roles such as CFO at PayPal’s Venmo and at online checkout company Fast, which was acquired by Affirm.

Interviewed for the PYMNTS series “A Day in the Life of a Digital-First CFO,” Mitchell said that to deal with churn, Zepz makes sure its pricing — including transaction fees and exchange rates — is competitive with other remittance companies and that its know-your-customer (KYC) activities can be handled beforehand to avoid holds or declines.

Zepz also works with its debt partners to determine the most efficient working capital solution to finance its daily remittances.

“We’re constantly looking to optimize our cost structure so that we can offer the best pricing available,” Mitchell said.