Rutledge Reaches Settlement with MoneyGram
February 11, 2016
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge today has reached a settlement with Dallas-based MoneyGram Payment Systems Inc. resolving a multistate investigation that tied MoneyGram to fraudulent activities based on complaints from consumers who used the company’s wire transfer service to send money to third parties involved in schemes to defraud consumers.
“Arkansans have heard it time and again, over the phone, in letters or in emails: ‘wire this amount of money and you will win big,’” said Attorney General Rutledge. “But these claims always turn out to be a scam, and if a consumer does wire money, it is almost impossible to get it back. MoneyGram failed to maintain effective anti-fraud measurers to prevent consumers from suffering financial losses as a result of these fraud induced transfers. Fortunately, thanks to this settlement, restitution payments will be made available to a number of Arkansans, and MoneyGram has agreed to improve its anti-fraud program, provide more warnings to consumers and improve agent training.”
Under the terms of the settlement, 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:
- 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.
- Sound mechanisms to evaluate actual fraud rates and consumer losses from fraud-induced money transfers in order to utilize that information to improve compliance.
- Continued enhancement of technology solutions, including its Anti-Fraud Alert System
Additionally, MoneyGram has agreed to pay a total of $13 million to states to fund a nationwide consumer restitution program and for the states’ costs and fees. 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 it under the settlement. Generally, consumers who are eligible for restitution previously filed complaints with MoneyGram between July 1, 2008 and August 31, 2009, regarding fraud-induced transfers sent from the U.S. to foreign countries other than Canada.
More information about this settlement is available at the Settlement Administrator’s website, MoneyGramSettlement.com.
Rutledge reminds Arkansans who receive solicitations from strangers promising big winnings to toss those letters in the trash, delete the email or hang up the phone and those who are contacted about a grandchild, friend or family member in distress should reach out separately to the friend or family member to independently verify that the relative is actually in need of the assistance.
In addition to Arkansas, the following participated in the settlement: Alabama, Alaska, Arizona, 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, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.