Came across this information on another anti-scam web site I belong to and wanted to share it.For Release: 10/20/2009
MoneyGram to Pay $18 Million to Settle FTC Charges That it Allowed its Money Transfer System To Be Used for Fraud
Company Also Required to Implement Comprehensive Anti-Fraud Program and to Monitor its Agents
MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars. MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.
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.
“Money transfer services have a responsibility to make sure their systems don’t become conduits to rip people off,†said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “In this case, MoneyGram not only ducked this responsibility, but also looked the other way while its agents took part in the scams.â€
You can read the rest of the story at the link below.http://www.ftc.gov/opa/2009/10/moneygram.shtmHere is some useful information in case you decide not to read the rest of the story as it is quit long.Consumer Education
The FTC has a new Consumer Alert, available on its Web site at
http://ftc.gov/bcp/edu/pubs/consumer/alerts/alt034.shtm, titled “Money Transfers Can Be Risky Business.†It includes useful information on how consumers can avoid telemarketing and money transfer fraud, including the following tips. Don’t wire money to:
someone you don’t know, in the U.S. or in a foreign country;
someone claiming to be a relative in the midst of a crisis and who wants to keep the request for money a secret;
someone who says a money transfer is the only form of payment that’s acceptable; or
someone who asks you to deposit a check and send some of the money back.
Consumers interested in the process of redress administration should call 202-326-3755.