The financial-technology (fintech) firm Chime Financial must pay a $3.25 million civil money penalty (CMP) and provide at least $1.3 million in consumer redress for its failure to timely provide consumers their account balance refunds after they closed their accounts, the Consumer Financial Protection Bureau (CFPB) said in an order issued Tuesday.
Chime’s failure to make those refunds within the 14-day period promised in its own account agreements – not providing them in thousands of cases for weeks or even months following account closures – “inflicted significant financial harm on consumers who did not have access to critical funds to help make ends meet,” the bureau said Tuesday. “In some cases, consumers had to seek expensive forms of credit to cover bills that were due.”
Chime Financial, the bureau said, is a fintech company that designed and services consumer banking accounts for two separate FDIC-insured “partner banks.” It said the company is responsible for most customer service on the consumer accounts. Even with the 14-day account balance refund policy, in most instances, Chime automatically refunds remaining balances (over $1) by check, the bureau said in the consent order.
The order states that Chime committed unfair acts or practices in violation of the Consumer Financial Protection Act (CFPA) of 2010. The order requires the firm to come into compliance and to pay the monetary penalty and restitution.
CFPB Takes Action Against Chime Financial for Illegally Delaying Consumer Refunds
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