MoneyGram Hit with $250K Fine for Botched Transfers

NEW YORK – International money transfer giant MoneyGram International, Inc., and MoneyGram Payment Systems, Inc., (MoneyGram) is coughing up $250,000 to New York State after a hard-hitting investigation by Attorney General Letitia James exposed years of shoddy practices that left customers’ hard-earned cash hanging in the balance. The company, which moves money for hundreds of thousands of Americans annually, was accused of routinely failing to deliver funds promptly or issue timely refunds when things went south.

The Attorney General’s office, alongside the Consumer Financial Protection Bureau (CFPB), initially filed suit against MoneyGram back in April 2022. The charges? A pattern of ignoring legal requirements to investigate errors swiftly and accurately, and a consistent inability to get money where it needed to be, when it needed to be there. While the CFPB later bowed out of the legal fight, Attorney General James pressed on, securing this significant penalty and a mandate for the company to clean up its act.

“New Yorkers who want to send funds to their loved ones abroad should be able to trust that the companies handling their hard-earned money are operating honestly,” Attorney General James stated bluntly. “MoneyGram failed to follow the law for years, sometimes leaving its customers in the dark about where their money went. My office stopped MoneyGram’s illegal behavior and will continue to protect those who rely on MoneyGram to support their families.”

MoneyGram, a non-bank financial services behemoth with a staggering 440,000 locations worldwide and a robust digital platform, facilitates remittances – money sent from the United States to over 200 countries and territories. Hundreds of thousands of New Yorkers depend on the service for millions of transactions each year. The OAG and CFPB’s initial complaint detailed years of violations of both state and federal consumer protection laws, alleging MoneyGram consistently failed to provide timely access to funds, resolve errors efficiently, and offer accurate information to its customers.

The settlement reached with the Attorney General’s Office doesn’t let MoneyGram off the hook, even with the CFPB’s withdrawal. The agreement compels MoneyGram to adhere to consumer protection laws, ensuring funds and refunds are processed on time. It also demands accurate disclosures to customers and a commitment to promptly investigating any errors. The company is now prohibited from misleading senders or falsely claiming a lack of liability for mistakes. Beyond compliance, the $250,000 penalty serves as a clear message: cutting corners with people’s money has consequences.

The case was spearheaded by Assistant Attorneys General Laura C. Dismore and Christopher McCall, with contributions from former Assistant Attorney General Jason Meizlish of the Consumer Frauds and Protection Bureau. The Bureau, led by Bureau Chief Jane Azia and Deputy Bureau Chief Laura Levine, operates under the Division for Economic Justice, headed by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy. This office will continue to monitor MoneyGram’s operations to ensure full compliance and protect New York consumers from future financial harm.

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