By Jonathan Stempel and Katanga Johnson
NEW YORK (Reuters) -MoneyGram International Inc was sued on Thursday by two regulators for repeatedly violating a federal rule designed to make it easier for people to send money to friends and family outside the United States.
The complaint against MoneyGram, one of the largest U.S. providers of remittance transfers, was filed in Manhattan federal court by the U.S. Consumer Financial Protection Bureau and New York Attorney General Letitia James.
Remittance transfers let people in the United States send money electronically to people in other countries, and exceed $100 billion annually.
MoneyGram was accused of having repeatedly “stranded” recipients waiting for their money, given senders inaccurate information about when transfers would be completed, and failed to address customer complaints in accordance with the 2013 rule.
The regulators said problems persist despite a series of software and technology updates in response to CFPB examinations, and that some transactions are still getting “stuck” in MoneyGram’s systems.
“MoneyGram spent years failing its customers and failing to follow the law, ignoring customer complaints and government warnings in the process,” CFPB Director Rohit Chopra said in a statement. “MoneyGram’s long pattern of misconduct must be halted.”
MoneyGram did not immediately respond to requests for comment. The Dallas-based company agreed in February to be acquired by private equity firm Madison Dearborn Partners in a $1.8 billion transaction.
In afternoon trading, MoneyGram shares were down 55 cents, or 5.1%, at $10.10, after earlier falling to $9.76.
Thursday’s lawsuit seeks unspecified refunds, restitution and civil damages, among other remedies.
(Reporting by Jonathan Stempel in New York and Katanga Johnson in Washington, D.C.; Editing by Paul Simao and Andrea Ricci)
