Moneygram agrees to pay $18 million back to fraud victims

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Master Baiter Joined: 20 Apr 2009 Posts: 120 Location: USA

MoneyGram International announced today that it would pay $18 million to the FTC to settle charges it allowed wire fraud to happen between 2004 and 2008.
http://consumerist.com/5386160/moneygram-agrees-to-pay-18-million-back-to-fraud-victims

Master Baiter Joined: 20 Apr 2009 Posts: 120 Location: USA

The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada – after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans. The $84 million in losses is based on consumer complaints to MoneyGram – actual consumer losses likely are much higher.

The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes. According to the FTC's complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

Master Baiter Joined: 20 Apr 2009 Posts: 120 Location: USA

According to a recent FTC survey cited in the complaint, at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced. The Commission's complaint further stated that based on the more than 20,600 fraud complaints MoneyGram itself received, U.S. consumers lost more than $44 million to cross-border money-transfer frauds between 2004 and 2008 alone. When combined with losses reported by U.S. consumers on money transfers within the United States, that number grows to $84 million.

The FTC's complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network, claiming that proposals to deal with the problem were too costly and were not the company's responsibility. The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. Some employees who raised concerns were disciplined or fired, the FTC charged.

Posted: Sat Oct 24, 2009 11:32 am

Someone already beat you to it, dude. Wink

http://forum.419eater.com/forum/viewtopic.php?t=173684

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