For Immediate Release - February 11, 2016

MoneyGram to Pay $13 Million in Multistate Settlement Over Wire Transfer Scams, AG Healey Offers Tips for Consumers

Settlement Funds Provide Restitution to Massachusetts Consumers; Company to Improve Anti-Fraud Program

BOSTON – A national wire transfer service has agreed to pay $13 million to resolve a multistate investigation into fraudulent money transfer scams, Attorney General Maura Healey announced today. The settlement funds will provide restitution to eligible consumers and a payment to the states that participated in the multistate investigation. The settlement will also require the company to improve its anti-fraud program.

AG Healey’s Office, along with 48 other states and the District of Columbia, participated in the multistate settlement with Dallas-based MoneyGram Payment Systems, Inc. (MoneyGram). Today’s settlement resolves a multistate investigation into complaints from consumers who used MoneyGram’s wire transfer service to send money to third parties in foreign countries that turned out to be fraudulent. 

“Consumers should always be wary of any requests for an immediate transfer of money through a non-bank money transfer service or reloadable payment card,” said AG Healey. “These types of scams range from ‘grandparent’ scams to lottery and contest scams and rely on money transfer services because there is often no way to trace the money, reverse the transaction, or recover the money once it reaches the hands of the scammer.”

Under the terms of the settlement, MoneyGram has agreed to pay a total of $13 million, of which approximately $9 million will fund a nationwide consumer restitution program. The remainder of the settlement funds will go to the participating states for costs and fees, including $210,000 to Massachusetts. 

Consumers eligible for the nationwide restitution program will be contacted by a settlement administrator.

As part of the settlement, MoneyGram has also agreed to improve its anti-fraud programs to better prevent fraud-induced wire transfers. MoneyGram will be required to provide additional compliance training for agents, maintain guidelines regarding when an agent’s conduct warrants suspension or termination, operate a hotline system where employees and agents can report noncompliance with anti-fraud measures, and continually enhance its technology solutions to protect consumers.

AG Healey warns consumers to be extremely suspicious if they receive a telephone call from someone asking for money or personal information, including when:

  • The caller is a stranger — in this country or anywhere else;
  • The caller says he or she is a grandchild or relative in a crisis;
  • The caller is in another country or a far-away location;
  • The caller says he or she is in trouble and urgently needs money;
  • The caller requests secrecy;
  • The caller asks for the funds to be sent by wire transfer.

More information about this settlement is available at the Settlement Administrator’s website: www.MoneyGramSettlement.com.

Additional information and resources pertaining to consumer scams are available on the Attorney General’s website. Consumers with concerns can call Attorney General Healey’s Consumer Hotline at (617) 727-8400. The FTC also provides information about money wire scams on their website, www.ftc.gov

In Massachusetts, this matter was handled by Deputy Division Chief Monica Brookman and Legal Analyst Emily Garvey, both of AG Healey’s Insurance and Financial Services Division.

 

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