by guest blogger Caitlin Watkins
The long wait is over. Starting OCTOBER 28, 2013 consumers in the U.S. will have important new rights when they send money to friends and family in other countries. The Consumer Financial Protection Bureau (CFPB) has new rules that protect consumers sending international money transfers, called “remittances,” so that they can comparison shop for the best price and have a clear way to fix problems if a transaction goes wrong.
The new rules that go into effect on October 28 will give consumers these strong protections, for the first time under federal law:
- Disclosures showing actual exchange rates, fees, and amount of money to be delivered before you make the payment;
- A receipt confirming the payment;
- The right to cancel the transaction within 30 minutes of making the payment;
- The right to dispute errors and get your money back if the money doesn’t arrive as promised.
Thanks to these new rules, consumers will be able to do better comparison shopping to figure out which services best meet their needs. This is important because there are a number of different ways to send money overseas:
- Big money transfer companies, like Western Union and Money Gram;
- Bank-to-bank account transfers; or
- Newer services that use mobile technology: for example, Regalii (regalii.com) is a relatively new service in the Dominican Republic that uses SMS or text message to send money to support loved ones by either paying their bills or buying them food. If you would like to buy groceries using Regalii’s online supermarket, you can spend $25, $50, or $100 for designated food packages that will arrive at your family’s door in three days. If you would like to prepay their bills, Regalii allows you to select the utility company so that the bill is charged directly to your cell phone bill.
Remittances are big business, and they help global citizens support their home countries in a major way. According to the World Bank, remittance flows to developing countries topped $400 billion in 2012. Due to the fact that remittances are such a highly utilized industry, there are a lot of places that consumers can be taken advantage of through excess fees, overcharges, exchange rates and taxes.
To avoid getting ripped off, do your homework and check out these tips from Consumer Reports on how to get the best deal. You can access them here.
Have you used any of these services to send money to loved ones who are far away? Tell us about it by sharing your story!