The Consumer Financial Protection Bureau has made a new rule that took effect Monday November 4 that is setup to provide those making an international bank transfer more reliability and greater transparency.
Every year, billion of U.S. dollars are wired from the U.S. to other countries. Companies providing remittance transfer services will now have to disclose all costs prior to the transaction being made, provide payment verification and offer a system to resolve disputes.
The new regulation, authorized through the Dodd-Frank Wall Street Consumer and Reform Protection Act, applies only to international transfers that are $15 or more and handled through a credit union, bank, thrift and the majority of other companies that are in the business of providing such service.
The fees for the transfer service are required to be disclosed along with the exchange rate and any taxes so the customer knows what the true cost of making the transfer is prior to approving it.
The information must be supplied at no charge and the customer cannot be obligated to continue with any transaction if they decide not to. It can be used to check out prices in the market as well.
When a transaction is completed, a receipt should be given to the emitter that shows proof that payment was made as well as the exchange rate and fees. The receipt should also have a time when the money being transferred will be available at its final destination.
International wire transfer customers have 180 days or six months from the time of the transfer to dispute any error. The wiring company is then given up to 90 days to make its investigation and give the customer its results.
In certain situations, such as the money never reached its destination, the customer is allowed to ask for a complete refund or have the same money resent.
In the majority of cases, customers have as many as 30 minutes and sometimes longer, to cancel the transaction after having paid for it, at no cost and be given a complete refund.
The vast majority of financial institutes support this new rule and some had even implemented similar policies prior to the rule being put in place.