If you send money abroad, you know the process can be confusing and expensive. But rules announced recently by the Consumer Financial Protection Bureau should make the process simpler and easier to understand.
Because there are so many factors involved (senders have to account for exchange rates, taxes and fees — sometimes on both ends of the transfer — while trying to wire the right amount of money to a relative or friend in another country) it can be tricky to calculate the right amount to send.
The new rules aim to make that simpler. They cover transfers of at least $15 from the U.S. to another country, and they allow consumers to see the exchange rate, taxes and fees before paying for the transfer. Consumers are also notified of potential fees from the receiving bank.
Such pre-payment disclosures should allow consumers to compare costs among transfer services and complete transactions with more confidence. Transfers within the U.S. are not covered by the new regulations, neither are those sent through companies that regularly provide fewer than 100 remittance transfers a year.
Once a consumer has paid for the transfer, he or she must be allowed to cancel it within at least 30 minutes of the transaction. Transfers scheduled in advance must be canceled at least three business days before they were set to occur.
Should a problem occur, consumers now can dispute an error with the transfer provider — and they have up to six months to do so. The company must respond to the complaint with an investigation within 90 days. Consumers could receive refunds or resend the money in some cases.
While these rules won’t protect consumers from fraud (though the cancellation time frame could be helpful in that regard), they may make individuals more comfortable sending money to family and friends in other countries.
At the same time, consumers should know not to wire money to strangers — stateside or abroad — because such transactions are a favorite of scammers, and the sender has little protection in these cases. Sometimes a resourceful fraudster will claim to be a relative; it’s a good idea to verify the situation before sending money.