MoneyGram Sued for Allegedly Delaying Transfers and Withholding Refunds

The international money transfer company MoneyGram harmed customers by delaying transfers and failing to properly investigate and fix transfer errors, according to a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) and New York’s attorney general. The suit accuses MoneyGram of repeatedly defying a variety of consumer protection laws and failing to correct problems identified by regulators. Officials at the consumer bureau did not specify how many customers they believe were harmed, but they pointed to MoneyGram’s broad reach: The company transmits around $100 billion a year for some 47 million customers in 200 countries. Immigrant workers often rely on MoneyGram and its competitors to send money to relatives back home.

Letitia James, New York’s attorney general said “Companies have an obligation to be transparent with consumers, treat them fairly and follow the law, but MoneyGram repeatedly failed to do so.” MoneyGram responded in a written statement calling the suit “frivolous.” Rohit Chopra, the consumer bureau’s director, cast MoneyGram’s actions as part of a pattern of misdeeds. The company paid $18 million in 2009 to settle fraud charges brought by the Federal Trade Commission, and paid $125 million in 2018 to settle charges that it had violated its earlier agreement with the commission and a 2012 deal with the Justice Department regarding its anti-fraud measures.

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