CFPB fines Chime $3.25m for customer refund delays
US fintech Chime has been fined $3.25 million by the Consumer Financial Protection Bureau (CFPB) for failing to issue balance refunds quickly enough to consumers after their checking and savings accounts were closed.
Chime fined $3.25m by CFPB
The CFPB says: “Until 2021, Chime’s policy, reflected in consumer account agreements, was to process and mail refund checks within 14 days of an account’s closure.”
However, the regulator claims that “thousands of consumers waited for weeks or even months for balance refunds” after closing their accounts, claiming that it found “thousands of instances in which Chime did not get refunds to consumers within 90 days”.
It claims impacted consumers were “often unable to pay for basic living expenses, and likely had to use or search for expensive credit alternatives, such as credit cards or payday loans”.
Chime partners with two FDIC-insured banks, The Bancorp Bank and Stride Bank, to offer financial products, including checking accounts, savings accounts, and credit cards, and is responsible for processing account activity, including payments, which it does by contracting with a third-party payment processor.
In a statement, Chime says “the majority of the delayed refunds were caused by a configuration error with a third-party vendor during 2020 and 2021”.
“When Chime discovered the issue, we worked with our vendor to resolve the error and issued refunds to impacted consumers. We share the Bureau’s goal to create a more competitive and accessible financial landscape that is good for everyday consumers,” the fintech adds.
“Our settlement agreement with the CFPB reflects our belief that the timely handling of customer matters is critical, even amid the pandemic’s unique challenges.”
In addition to the fine, which is to be paid to the CFPB’s victims relief fund, Chime is to also pay “at least $1.3 million in redress to harmed consumers”.
“Chime’s customers had to wait weeks or months for access to their own money and were forced to use alternative funds to cover their essential expenses,” comments CFPB director Rohit Chopra.
“Fast-growing financial firms must treat their customers fairly and understand that federal law is not a suggestion,” he adds.
Chime was founded in 2012 and is based in San Francisco, California. It is estimated to have around 22.3 million customers, according to US consultancy firm Cornerstone Advisors. Earlier this year, Bloomberg reported that the fintech planned to go for an initial public offering (IPO) in 2025.
I want to know how can I get a part of that money because my account was hacked February 26th 2024 and I haven’t gotten a check since and they’re telling me that they don’t refund money anymore and that’s my government check so I don’t understand why they couldn’t wouldn’t give me a credit after I called them a reported that someone stole my bank cards and took all of my money out of account and they Said, Wouldn’t, Couldn’t, And Didn’t refunded me my money who can I talk to to get my money back
Would I get a refund
This is October 2024, and Chime has just now locked me out of my account after I received a a substantial back pay from SSI. I have $5,000 and can’t pay my dad back $5 I owed him. I need help and don’t know where to turn. I cannot afford a lawyer.