Other Languages5,000 Washington consumers may be affected
SEATTLE — Attorney General Bob Ferguson today announced Moneygram Payment Systems, Inc. will pay $13 million to resolve a multi-state investigation into how Moneygram’s wire transfer service was used in schemes to defraud consumers.
The investigation focused on whether Moneygram falsely represented to consumers that it has a robust fraud prevention program when in fact it did not have adequate internal fraud prevention controls.
Moneygram also agreed to implement important new measures in its anti-fraud program designed to help detect and prevent consumers from suffering financial losses as a result of fraud-induced wire transfers.
“I am committed to stopping fraudsters who con consumers into wiring money,” Ferguson said. “Today’s agreement will help some of those consumers recover, and it will hold Moneygram accountable to create more robust measures to protect against future wire fraud using its services.”
In addition to Washington, 48 states and the District of Columbia are involved in today’s agreement and the preceding investigation.
A signed copy of the agreement (called an Assurance of Discontinuance) will be added to the online version of this release later today at www.atg.wa.gov.
Restitution
Moneygram has agreed to pay $9 million in restitution to consumers who filed complaints with Moneygram between July 1, 2008, and Aug. 31, 2009, regarding fraud-induced wire transfers to foreign countries other than Canada.
An estimated 5,000 Washington consumers fall into this category. Those eligible for restitution will be contacted by a settlement administrator by June 1, 2016.
More information will be available at www.MoneyGramSettlement.com.
An additional $4 million will go toward costs and fees of the participating states; Washington will receive $375,000 to recover its investigation costs.
Fraud prevention
Moneygram also agreed to several measures regarding its anti-fraud program. The program must be documented in writing and at a minimum, must include the following elements:
- Mandatory and documented compliance training for agents and guidelines regarding when an agent’s conduct warrants suspension or termination;
- Suspension or termination of agents who fail to take commercially reasonable steps to reduce fraud-induced money transfers;
- A hotline system — telephonic and electronic — where employees and agents can report noncompliance with anti-fraud measures;
- Specific measures to determine fraud rates and how much consumers lose from those frauds; and
- Continued enhancement of technology solutions, including its Anti-Fraud Alert System (AFAS).
Know the signs
Scams utilizing wire transfers are all too common. Crooks prey on fears by pretending to be a loved one in distress, or on hopes, claiming their victim has won a prize and need only send a deposit to claim it.
Look for red flags that can signal a scam:
- You are asked to wire money.
- You are sent a check in connection with a payment request. Cons often win their victims’ confidence by sending a fake check for more than the amount of purchase or to cover so-called processing fees, shipping costs or other expenses. It may be a cashier’s check, personal check or money order. They instruct the victim to cash the check or money order and send them a portion of the money by wire.
- The contact indicates a confirmation code or money transfer control number (MTCN) is needed before your money can be withdrawn. A code or control number is never required for a wire transfer. Once you wire money, it can be picked up immediately.
- A caller or email appears to originate from overseas.
- The person communicates via TTY service. TTY is used by the hearing impaired. Cons prefer the service because it disguises thick accents and makes calls untraceable. Follow-up correspondence is then often by email.
Scams can be reported to the Attorney General’s Office, Federal Bureau of Investigation’s Internet Crime Complaint Center or Federal Trade Commission.
Participating in today’s agreement are: Washington, Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming and the District of Columbia.
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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contact:
Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov