Consumer complaint received 2022-11-26
Company: U.S. BANCORP
State: WA
Product: Money transfer, virtual currency, or money service
Sub-product: Foreign currency exchange
Issue: Incorrect exchange rate

Complaint:
SUMMARY My bank failed to disclose the full cost of an international wire transfer that involved a foreign currency exchange. Instead, it disclosed only minor applicable wire transfer fees and did not disclose other costs, likely to include additional fees, markup, and significant bank profit. It did this in a fraudulent manner by hiding these additional costs in XXXXhe exchange rate it used for the transaction while representing this rate as the prevailing rate issued by the Federal Reserve Bank XXXX Fed ), which it was not. This lack of transparency regarding the actual prevailing foreign exchange rate prevented me from properly comparing rates available elsewhere. 

As remedy, the bank should apply only those transaction costs it disclosed to me and apply the true daily exchange rate published by the Fed, and return to me all non-disclosed transaction costs. It must also be more transparent in its future cost disclosures with its customers, to include all applicable fees, markup, and profit from any similar transactions. 

DETAILS I am a US citizen residing in Washington state and decided to purchase a vehicle in XXXX, XXXX XXXX, XXXX. The XXXX car dealership required payment of funds in a timely manner to remove the vehicle from public sale. On XX/XX/XXXX, I contacted the local branch of US Bank, my bank of 33 years, to understand my options. My banker explained that my options for payment included an international wire transfer, a cashier 's check, and/or cash. My banker recommended the wire transfer option and disclosed that a fee of {$50.00} would apply. No other disclosers were made. I scheduled a time with her to complete the transaction on XX/XX/XXXX. 

On XX/XX/XXXX, after making arrangements with the car dealership, I met with my banker to complete the wire transfer. At that time, she advised that an additional transfer fee of {$32.00} would be applied by the recipient bank and that I needed to include that payment in the amount transferred. I agreed to the additional fee. No other disclosures were made until she presented the exchange rate she would use for the transaction, {$1.00} USD = {$1.00} XXXX  This rate was well below the prevailing rate published elsewhere, so I objected. She replied that it was the " Fed 's rate '' and that she couldn't change it. Her statement involving the Fed lent great credibility to her quoted rate and she provided no further explanation or options, so I assumed that rates must have dropped rapidly and without my knowledge. With a pending deadline with the car dealership, I completed the transaction. A name-redacted copy of the receipt is attached. 

On my return home from the bank, I internet-searched the prevailing USD : XXXX XXXX rate to satisfy my curiosity. A XXXX screenshot is attached, indicating the rate at about the time of my transaction as {$1.00} USD = {$1.00} XXXX. A week later, the Federal Reserve Bank published the daily rate for XX/XX/XXXX as {$1.00} USD = {$1.00} XXXX. This screenshot is also attached. Another website published by XXXX XXXX provides opening, closing, high, and low rates for XX/XX/XXXX, and indicates the rate did not fall below {$1.00} XXXX  on that day. Additional attached screenshots from the XXXX  XXXX XXXX, the XXXX XXXX XXXX, XXXX XXXX and XXXX provide very similar results and confirm that the rate quoted at my bank as the Feds rate was not the actual rate published by the Federal Reserve Bank and was well below any prevailing rate for any moment of that day. 

A statement near the bottom of my bank transaction receipt acknowledges my right to dispute errors in my transaction, so I re-contacted my banker to ask about the discrepancy. She notified me that she discussed the matter with her manager and determined that nothing could be done because I had signed the rate disclosure. She suggested that I contact the Wire Department in case there was anything it could do. I contacted the Wire Department and was only referred back to my local branch. 

It is outrageous that any bank, much less my bank of many years that I have placed so much trust in over multiple decades, would consider our transaction to have included a proper disclosure of the USD : XXXX exchange rate for a wire transaction! In both my discussions of the cost of the transaction with my banker, on XX/XX/XXXX on the phone while researching my options and on XX/XX/XXXX in person at the time of the transaction, the only cost disclosed was the wire transaction fees. It is now apparent that the bank hid an additional cost, its very exorbitant profit, without disclosure to me. It is equally outrageous that this bank would rely on its disclosure as defense for why it had done nothing wrong! Its exchange rate disclosure, combined with my bankers verbal explanation at the time of the transaction, was exactly what was wrong, because it was incomplete, misleading, and not representative of the full breadth of my options for making the transaction ; it was likely, however, the most profitable option for the bank, so it was recommended. 

My internet research also led me to the website of a competing national bank, XXXX  XXXX XXXX, which includes a page labeled, Foreign Exchange Rate FAQs. This page addresses how the bank determines exchange rates and discloses several factors including profit, fees, and markups ( a screenshot of the page is attached ). No such webpage was located during my search of the US Bank internet site. No such explanation was provided either verbally or written during my transaction ( or even subsequently since my complaint! ). I wonder whether this detailed explanation is mandatory or whether XXXX  XXXX XXXX just considers this good business. If mandatory, the requirement was certainly not met by US Bank ( nor was any standard of good business met ). 

RESOLUTION Due to the deceptive non-disclosure practice by US Bank of its additional profit hidden within its low exchange rate, US Bank owes me the difference between the amount equivalent to the prevailing rate published by the Federal Reserve Bank for that day and the amount it applied, less the fees that it actually disclosed. Given that the car dealership required {$51000.00} XXXX  paid to it, that US Bank charged a {$50.00} USD wire transfer fee, that the recipient Bank XXXX XXXX XXXX charged a {$32.00} CAD wire transfer fee, and that the daily rate published by the Federal Reserve Bank for XX/XX/XXXX was {$1.00} USD = {$1.00} XXXX, that amount is calculated below. 

The amount required by the XXXX  XXXX XXXX XXXX was the vehicle purchase price ( {$51000.00} CAD ) plus its wire transfer fee ( {$20.00} CAD ) for a total of {$51000.00} XXXX, or {$39000.00} USD at an exchange rate of {$1.00} USD = {$1.00} XXXX. The amount transferred from my US Bank account to the XXXX  XXXX XXXX XXXX was {$40000.00} USD, for a difference of {$1100.00} USD -- this is the amount that US Bank actually charged me for this transaction! Subtracting the legitimate US Bank wire transfer fee of {$50.00} USD from that amount, provides a difference of {$1000.00} USD. This is the amount that US Bank overcharged me and that should be returned to my account without unreasonable delay.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation