MoneyGram is taken to court by the New York state

Wednesday 27 April 2022 14:48 CET | News

MoneyGram has been sued by regulators that said it repeatedly and unfairly violated a federal rule designed to facilitate sending money abroad.

The complaint against MoneyGram, a provider of remittance transfers, was filed in Manhattan federal court by the US Consumer Financial Protection Bureau (CFPB) and a New York Attorney General.

Remittance transfers let people in the US send money electronically to people in other countries, and exceed USD 100 billion annually. MoneyGram was accused of having repeatedly ‘stranded’ recipients waiting for their money, given senders inaccurate information about when transfers would be completed and failed to address customer complaints in accordance with the 2013 rule.

Problems persist despite a series of software and technology updates, with some transactions still getting ‘stuck’ in MoneyGram's systems, the complaint said. CFPB officials said that MoneyGram spent years failing its customers and failing to follow the law, ignoring customer complaints and government warnings in the process and that its pattern of misconduct must be halted.

In a statement, MoneyGram’s representatives said the company plans to defend against the ‘frivolous’ lawsuit, and that its compliance programme was effective, and consumers suffered no harm. They further commented that the CFPB entered discussions with closed minds and chose to make unjustifiable and unprecedented claims.

The lawsuit seeks unspecified refunds, restitution, and civil damages. It is the CFPB's fifth remittance-related case since 2019. The case is Consumer Financial Protection Bureau et al v MoneyGram International et al, US District Court, Southern District of New York, No. 22-03256.

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Keywords: remittance, money transfer, cross-border payments, regulation
Categories: Payments & Commerce
Companies: MoneyGram
Countries: United States
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Payments & Commerce


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