Allegations include repeatedly delaying money transfers and leaving customers stranded
The Consumer Financial Protection Bureau (CFPB) and the New York Attorney General filed suit against remittance provider MoneyGram alleging the company's practices repeatedly harmed consumers.
According to the complaint, MoneyGram systematically and repeatedly violating various consumer financial protection laws and leaving families high and dry. The lawsuit specifically alleges that the company stranded customers waiting for their money when it failed to deliver funds promptly to recipients abroad.
In a statement, the CFPB noted that MoneyGram is a repeat offender, and its practices continue to harm consumers.
“MoneyGram spent years failing its customers and failing to follow the law, ignoring customer complaints and government warnings in the process,” said CFPB Director Rohit Chopra. “MoneyGram’s long pattern of misconduct must be halted.”
The specific allegations of this complaint against MoneyGram include:
- Stranded customers waiting for their money: Customers paid MoneyGram to transmit money as quickly as possible but MoneyGram failed to do so and instead held up funds unnecessarily. Holding the money in limbo resulted in needless delays and harmed people who were relying on that money to pay for necessary living expenses. In addition, the company repeatedly failed to accurately disclose how long it would take to make funds available to the recipients abroad.
- Botched instructions to its employees on how to resolve disputes: MoneyGram failed to instruct or direct its employees on how to comply with laws on resolving disputes. The company also failed to report the results of its error investigations to consumers and failed to provide a written explanation of its findings to consumers.
- Neglected to develop and document policies and procedures: MoneyGram failed to put in place policies and procedures designed to ensure compliance with money-transferring laws. MoneyGram also failed to retain evidence of its compliance with certain error resolution requirements as required.
MoneyGram is no stranger to lawsuits and enforcement actions for financial crimes. In 2009, MoneyGram settled fraud charges by agreeing to pay $18 million in an enforcement action with the Federal Trade Commission. In 2018, after failing to live up to the terms of the 2009 agreement, MoneyGram was ordered to pay $125 million in fines.