On April 21, 2022, the CFPB and New York Attorney General Letitia James announced that they are filing a lawsuit against MoneyGram International, Inc. and MoneyGram Payment Systems, Inc. for systemically 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.
The CFPB began its MoneyGram examinations between 2014 and 2016 and found multiple problems. In 2019, the CFPB did a subsequent exam to see if MoneyGram had followed through on fixing its problems. However, for more than five years of the CFPB working with MoneyGram to fully comply with the law, the company continually failed to do so.
MoneyGram is considered a repeat offender with its record of violating law enforcement orders on multiple occasions with multiple government agencies, including the Federal Trade Commission and the Department of Justice. According to the CFPB, MoneyGram violated Regulation E and the Remittance Transfer Rule, which implement the Electronic Fund Transfer Act, and the CFPA. Specifically, the CFPB and New York Attorney General James allege that MoneyGram:
Failed to to transmit customer’s money as quickly as possible instead held up funds unnecessarily;
Failed to instruct or direct its employees on how to comply with laws on resolving disputes; and
Neglected to put in place policies and procedures designed to ensure compliance with money-transferring laws, as well as to retain evidence of its compliance with certain error resolution requirements.
The CFPB’s full press release can be found here.
