Massachusetts banking authorities last week ordered InterTransfers, Inc. and its wholly owned subsidiary, Global Money Remittance Inc., a Miami-based company that specializes in money transfers used by foreign nationals living and working in the United States, to cease operations, after receiving reports that the companies failed to transmit customer funds to the intended recipients.
State action may not ease the fears of scores of Brazilian nationals who live and work on Martha’s Vineyard. In several conversations Wednesday, members of the Island’s large Brazilian community told The Times that money sent to relatives in Brazil never arrived.
InterTransfers, a 13-year old company licensed in Massachusetts since 2006, transferred nearly $26 million from Massachusetts consumers in 2012, most of it going to Brazil, according to state banking authorities.
On April 10, state banking regulators issued a temporary cease and desist order, which prevents the company from doing any more business in the state.
Also last week, the Florida Office of Financial Regulation issued cease and desist orders against InterTransfers and Global Money Remittance, according to the Florida Business Journal, after complaints from customers that their orders weren’t going through.
Island businessman Elio Silva, owner of the Tisbury Farm Market and Vineyard Grocer, said he used Global Money Remittance to transfer money as a convenience for his customers.
Mr. Silva said he facilitated transfers through a machine that worked like a reverse ATM machine. Customers arrived with cash and deposited the bills into a secure machine. The machine counted the money and electronically notified InterTransfer of the amount. InterTransfer then electronically transmitted a cash deposit into the recipient’s bank account in Brazil. An armored car arrived two or three times a week to collect the cash from the machine.
The amount transferred was typically $300 to $500, Mr. Silva said. He would collect a $10 fee per transfer and split the fee with the transfer company. Vineyard Grocer handled about 8 to 15 transfers each week.
Mr. Silva said he first heard that there were problems with transfers around April 1. Customers said money transmitted on March 25 was not transferred to the intended recipients. He said that he received notice of the cease and desist order from the state on Monday.
Mr. Silva has joined a group of 10 stores, eight of them off Island, to hire an attorney to expedite the return of his customers’ money. He said the transfer companies must be bonded before they are allowed to do business in the state and that he was certain the bonds would cover any money Global Money did not return.
In some cases, local transfer agents facilitate money transfers through a local bank account. Stores offering money transfer services must be licensed by the state. The licenses must be renewed annually.
Maira DeSouza, owner of Island Star, a small market on Beach Road in Vineyard Haven, said that she handles between 60 and 70 money transfers to Brazil per week. She said that she used InterTransfers for about one year until she received a notice last week from the Office of Consumer Affairs and Business Regulation alerting her to the order to cease and desist of InterTransfers. She said that about 25 customers have reported to her that money they transferred was not received in Brazil.
State has claim
Jayda Leder-Luis, a spokeswoman from the Massachusetts division of banking, said in a telephone conversation with the Times on Wednesday that money transfer businesses must post a $50,000 bond before they are allowed to do business in the state. After one year the bond must equal twice their weekly average of business and no less than $50,000.
She said, “The cease and desist orders include strict orders to transfer the monies to their intended destinations or be refunded with all fees to the senders.”
Ms. Leder-Luis said that if the companies fail to comply with the order in a timely manner the state will file a claim against the bonds to repay the money.
In issuing the cease and desist order, state banking regulators said the two companies failed to transmit approximately $232,000, involving 102 different different transactions from Massachusetts customers between April 4 and April 9. Those figures come from just three of the company’s 26 agents in Massachusetts.
Massachusetts regulators said they contacted officials at Global Money on April 9. Company officials acknowledged the failure to make some transfers, and said the company was experiencing some financial difficulty.
“InterTransfer’s representatives were unable to assure the (Division of Banking) that the corporation had the financial capacity to transmit the consumer funds previously collected for transmittal,” regulators wrote in the order.
The company has posted a statement on its website that it is no longer in business.
“Operational difficulties created by a volatile market began to grow over the past few months, which prevented delivery of the quality services that our customers deserve,” the statement said. “Unfortunately, these difficulties led us to the hard decision to close the company’s services.”
InterTransfers said in the statement that bureaucratic and legal requirements are slowing its response, but it promised that customers will get their money.
“Please be advised that we will comply with all outstanding obligations and commitments, especially those who have not had money transfers processed in recent days,” the statement said.
On its website, the company offered a phone number for information about missing transfers, but that number led to a recording that said the mobile number is no longer in service.
An earlier version of this story incorrectly reported that InterTransfers, transferred nearly $62 million from Massachusetts consumers in 2012. The correct figure is $26 million.