MoneyGram Sued for Allegedly Delaying Transfers, Withholding Funds

The Consumer Financial Protection Bureau (CFPB) and New York Attorney General Letitia James sued international money transfer company MoneyGram for allegedly delaying transfers and for failing to fix transfer errors.

In the 22-page complaint filed on April 21, CFPB and James alleged that MoneyGram repeatedly failed to deliver funds to recipients in a timely manner and did not accurately disclose to consumers when the transfers would be available.

The lawsuit also alleges that MoneyGram failed to properly investigate transfer errors, to instruct or direct employees on how to comply with laws to resolve disputes, and to retain certain evidence of its compliance with certain error resolution requirements.

CFPB and James alleged that MoneyGram’s alleged unfair practices largely impacted immigrants or refugees in the United States who  relied on the company to send money back to their native countries.

CFPB and James further accused MoneyGram of being a repeat offender of consumer protection and anti-fraud laws.

“MoneyGram… has not been following the law despite repeated warnings. For years, MoneyGram has been leaving families high and dry while they wait for their money,” CFPB Director Rohit Chopra said in a statement.

“Companies have an obligation to be transparent with consumers, treat them fairly, and follow the law, but MoneyGram repeatedly failed to do so. Today, we are suing MoneyGram to correct their unlawful practices and prevent them from further harming consumers,” James said in a separate statement.

The lawsuit seeks monetary relief for impacted consumers, an injunction to stop future violations, and imposition of civil money penalties.

In a statement, MoneyGram called the lawsuit “frivolous” and that the case involves a “complete absence of any consumer harm.”

MoneyGram added that it intends to “vigorously” defend itself in court.


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