MoneyGram has been slow to transmit funds in a timely manner, holding up the transfers “unnecessarily,” while also failing to accurately disclose how long the transfers would take, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General Letitia James charged in a civil lawsuit Thursday. MoneyGram also failed to train its employees in dispute resolution and neglected to put policies in place that would help it comply with money-transfer laws, the suit said. MoneyGram, which operates in more than 200 countries and served 47 million customers in 2021, specializes in “remittance” transactions—a way to send money online that’s often used by immigrants and refugees transferring funds back to people in their home countries, according to the suit. The CFPB and James said the company failed to comply with rules set up in 2013 providing basic consumer protections for remittance users, including requirements for the proper disclosure of information, error resolution, record retention obligations, and cancellation and refund rights. “For years, MoneyGram has been leaving families high and dry while they wait for their money,” CFPB Director Rohit Chopra said at a press conference about the lawsuit. “Mismanagement, including lax company policies and procedures, supported this chaos.” MoneyGram called the lawsuit “meritless” in a press release Friday, adding that over the last decade, it has invested “more than $800 million to enhance its compliance program and doubled the size of its compliance team to build a best-in-class program with record-low consumer fraud complaints.” The company has a history of troubles with regulators. They include a CFPB investigation between 2014 and 2016 that revealed multiple problems the company subsequently failed to address, according to the lawsuit. MoneyGram also paid millions of dollars to settle fraud charges brought by the Federal Trade Commission in 2009 and 2018, and entered into a deferred prosecution agreement with the Justice Department over issues including wire fraud in 2012, the suit said. Have a question, comment, or story to share? You can reach Terry at tlane@thebalance.com. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
