NEW YORK/WASHINGTON (Reuters) -MoneyGram Worldwide Inc was sued on Thursday by two regulators that stated it repeatedly and unfairly violated a federal rule designed to make it simpler for folks to ship cash to family and friends outdoors the US.
The grievance in opposition to MoneyGram, one of many largest U.S. suppliers of remittance transfers, was filed in Manhattan federal courtroom by the U.S. Shopper Monetary Safety Bureau and New York Legal professional Basic Letitia James.
Remittance transfers let folks in the US ship cash electronically to folks in different nations, and exceed $100 billion yearly.
MoneyGram was accused of getting repeatedly “stranded” recipients ready for his or her cash, given senders inaccurate details about when transfers can be accomplished and failed to handle buyer complaints in accordance with the 2013 rule.
Issues persist regardless of a sequence of software program and know-how updates, with some transactions nonetheless getting “caught” in MoneyGram’s methods, the grievance stated.
“MoneyGram spent years failing its clients and failing to comply with the legislation, ignoring buyer complaints and authorities warnings within the course of,” CFPB Director Rohit Chopra stated in an announcement. “MoneyGram’s lengthy sample of misconduct have to be halted.”
In an announcement, Dallas-based MoneyGram stated it plans to defend in opposition to the “frivolous” lawsuit, and that its compliance program was efficient and customers suffered no hurt.
“The CFPB and its director entered into discussions with closed minds and sadly selected to make more and more unjustifiable and unprecedented calls for,” the corporate stated. “In the end, MoneyGram refused to be strong-armed into an unfair settlement.”
MoneyGram agreed in February to be acquired by non-public fairness agency Madison Dearborn Companions in a $1.8 billion transaction.
In afternoon buying and selling, MoneyGram shares have been down 49 cents, or 4.6%, at $10.16, after earlier falling to $9.76.
Thursday’s lawsuit seeks unspecified refunds, restitution and civil damages. It’s the CFPB’s fifth remittance-related case since 2019.
“We shall be seeking to search a broader set of cures to halt repeated law-breaking and disrespect for the rule of legislation,” Chopra instructed reporters. “I’m dedicated to stamping out misconduct by corporations that break the legislation over and over.”
The case is Shopper Monetary Safety Bureau et al v MoneyGram Worldwide Inc et al, U.S. District Courtroom, Southern District of New York, No. 22-03256.
Reporting by Jonathan Stempel in New York and Katanga Johnson in Washington, D.C.; Modifying by Paul Simao and Andrea Ricci
