US consumer watchdog fines Chime $3.25 million for delaying refunds

The Chime logo is seen on a smartphone placed on U.S. dollars banknotes in this illustration taken January 24, 2022. REUTERS/Dado Ruvic/Illustration/File PhotoDigital bank Chime will pay a penalty of $3.25 million to the U.S. Consumer Financial Protection Bureau for failing to issue timely refunds to customers who closed their accounts, and will return at least $1.3 million to customers, the regulator said on Tuesday.

In a statement about Chime's penalty, CFPB Director Rohit Chopra said that “fast-growing financial firms must treat their customers fairly and understand that federal law is not a suggestion.”The CFPB found that thousands of Chime customers had to wait weeks or even months for refunds after closing their accounts with the company, even though Chime's policy promised refunds within 14 days.

In a statement, Chime said that most of the delayed refunds were due to a configuration error with a third-party vendor between 2020 and 2021. "When Chime discovered the issue, we worked with our vendor to resolve the error and issued refunds to impacted consumers," the company said.As part of the CFPB's order, Chime will pay at least $1.3 million to affected customers, with consumers generally receiving at least $150 if they had at least $10 that was not refunded 14 days after closing their account.

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