By CaraLynn Caulfield
This article has been updated to include a response from MoneyGram.
New York Attorney General Letitia James has secured a $250,000 settlement from MoneyGram for violating consumer protection laws by failing to deliver funds on time, delaying refunds, and mishandling customer error claims.
The settlement follows a 2022 lawsuit filed by Attorney General James and the Consumer Financial Protection Bureau (CFPB), which accused the international money transfer company of repeated failures to comply with federal and state regulations. Although the CFPB later withdrew from the case, the Office of the Attorney General (OAG) proceeded independently, ultimately holding MoneyGram accountable.
MoneyGram processes millions of transactions annually, including those involving hundreds of thousands of New Yorkers who rely on the service to send money to loved ones around the world. In 2020 alone, more than 600,000 individuals used MoneyGram at New York locations over 3.8 million times, according to the Attorney General’s office.
“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,” James said. “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.”
A significant portion of MoneyGram’s users are immigrants or refugees in the U.S. sending remittances to their native countries. Many of these customers are low-income and financially constrained, meaning they are less likely to have additional resources to compensate for delayed or missing funds—a reality that made MoneyGram’s failures especially damaging.
In response to the settlement, MoneyGram General Counsel Cory Feinberg said the company was “pleased to bring full closure to this legacy matter, which dates back years and involved no harm to consumers.”
“Over the past decade, MoneyGram has invested more than $800 million to build and enhance a best-in-class program and team,” Feinberg added, “and the Company is proud to operate one of the most robust, data-driven compliance and consumer protection programs in the industry.”
Under the terms of the agreement, MoneyGram must:
- Transfer funds and process refunds in a timely manner
- Provide accurate and complete disclosures to consumers
- Promptly and effectively investigate transaction errors
- Stop providing misleading information about consumers’ liability for errors
In addition to the monetary penalty, the settlement requires MoneyGram to implement stronger compliance measures to ensure transparency and lawful operations going forward.