A new federal law, effective Oct. 28, provides greater protections to people who wire money outside the United States. Companies that provide "remittance transfer" service now must disclose the costs before the transaction is made, provide proof of payment, and offer dispute resolution.
"People sending money to their loved ones in another country should not have to worry about hidden fees," Richard Cordray, head of the Consumer Financial Protection Bureau, said when the agency adopted the rule last year. "With these protections, international money transfers will be more reliable."
The new rule -- authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act -- applies to international wire transfers of $15 or more handled by a bank, thrift, credit union, and most other entities that offer such service. These institutions must provide prepayment disclosures of fees, taxes, and exchange rates for free and provide proof of payment if a transaction is completed. They also must provide an error-resolution process that gives customers up to 180 days to dispute an error. Customers now also have cancellation rights for up to 30 minutes after they pay, for a full refund at no extra charge. Cancellation can apply only when the funds have not been picked up by the designated recipient or deposited into their account.