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In a complaint filed in Manhattan federal court, the U.S. Consumer Financial Protection Bureau and New York Attorney General Letitia James said MoneyGram has repeatedly given senders inaccurate information about when transferred money would be available to recipients abroad.
The regulators also said MoneyGram has repeatedly failed to properly address customer complaints in accordance with the 2013 rule.
In morning trading, MoneyGram shares were down 83 cents, or 7.8%, at $9.82.
MoneyGram did not immediately respond to a request 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.
Remittance transfers let people in the United States send money electronically to friends and family in other countries, and exceed $100 billion annually.
The CFPB said it has previously examined MoneyGram’s remittance transfer procedures and directed it to fix problems. “But MoneyGram’s violations continued,” the complaint said.
Thursday’s lawsuit seeks unspecified refunds, restitution and civil damages, among other remedies.
