The New York Attorney General is suing MoneyGram, for repeatedly violating consumer laws, as announced through a statement on Thursday.
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Letitia James, the state attorney, reported that the lawsuit is being filed in conjunction with the Consumer Financial Protection Bureau (CFPB), for failing to deliver funds to recipients on time nor reimburse consumers when transfers were delayed.
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“The unfair practices of MoneyGram greatly affected immigrant communities that depended on the company to send money to their loved ones”, says the statement.
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Nearly 4 million MoneyGram transactions were made in NY
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The New York prosecutor also says MoneyGram failed to accurately notify consumers when their transfers would be available to overseas recipients, nor did it implement required policies and procedures designed to help protect consumers. “Essentially it left consumers in the dark about their money transfers when something went wrong,” he says.
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The New York Attorney General and CFPB lawsuit is against MoneyGram International, Inc. and MoneyGram Payment Systems, Inc. (MoneyGram), considered among the largest international money transfer providers in the country.
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In 2020, more than 600,000 people sent and received money using MoneyGram in New York doing it more than 3.8 million times. Senders of remittances are often low-income or face other financial constraints and are less likely to have extra money to replace arrears going to family or other recipients abroad.
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Lawsuit against MoneyGram mentions immigrants
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“Our immigrant communities trusted MoneyGram to send their hard-earned money to their loved ones, but MoneyGram let them down,” said Attorney General Letitia James. “ Consumers deserve to know where their money went. Businesses have an obligation to be transparent with consumers, treat them fairly and follow the law, but MoneyGram repeatedly failed to do so.”
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James also asserts that the purpose of the lawsuit against MoneyGram is to “correct their illegal practices and prevent them from further harming consumers. New Yorkers can trust that my office will always protect them from unscrupulous companies.”
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MoneyGram transmits around $100 billion a year for some 47 million customers in 200 countries.
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For its part, MoneyGram sent a statement stating that the company stands behind its compliance program and its treatment of customers, as evidenced by “our strong customer experience scores, 4.9-star rated app, consumer trust ratings, and customer reviews.” Remarkably high customer retention rates.”
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MoneyGram also indicates that it will defend in court “vigorously” its commitment to consumers.
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