Why are you gambling with my money

I still don't understand how Moneygram get away with being an unregulated business given that they are a money transmission system.

In case you don't know them, they operate a worldwide payment agent network via a series of national distribution partnerships (Post Office Counters in the UK), which allow individuals to send money between their agents anywhere in the world. Their money flows run into billions of dollars every day.

According to reports, they have a constant float of approximately $6bn, $4.4bn of which it invested in mortgage backed bonds, CDOs etc to generate additional returns. Unfortunately, the downturn in credit markets has resulted in anticipated losses of $200m in their second quarter results.

Now, if you are an individual sending money to far-off relatives etc, you hope that the service will deliver the money in "minutes", but sometime its takes longer. If this unregulated business has liquidity issues or goes bust whilst your money is in transit, you will have little or no comeback.

posted by John Wilson @ 12:51 PM Permanent Link newsvine reddit


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