By Jim Donovan: MoneyGram has agreed to pay a $13 million settlement to resolve a multistate investigation involving consumer fraud. The investigation focused on complaints of consumers who used MoneyGram’s wire transfer service to send money to third parties who were involved in schemes to defraud consumers.
This action was filed in the form of an assurance of voluntary compliance and has two main components. First, MoneyGram has agreed to pay a total of $13 million to the participating states to fund a nationwide consumer restitution program. Part of that sum also will cover the states’ costs and fees associated with the investigation.
Second, MoneyGram has agreed to maintain and continue to improve a comprehensive and robust anti-fraud program designed to help detect and prevent consumers from suffering financial losses as a result of these types of fraud-induced wire transfers. The program must be documented in writing and, at a minimum, must include the following elements:
The settlement provides for an independent third party settlement administrator who will review MoneyGram records and send notices regarding restitution to all consumers who are eligible to receive restitution under this settlement. Generally, consumers who are eligible for restitution previously filed complaints with MoneyGram between July 1, 2008 and Aug. 31, 2009 regarding fraud-induced transfers sent from the U.S. to foreign countries other than Canada.
MoneyGram Payment Systems, Inc. is a subsidiary of MoneyGram International Inc., which is headquartered in Dallas. MoneyGram provides services that enable consumers to transfer money to outlets throughout the world. It has a global network of approximately 350,000 locations where its agents send and receive money transfers.
Here are a few examples of scams that may involve money transfers: