NCL applauds FTC and DOJ settlement against MoneyGram for failing to police scammers

November 9, 2018

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—The National Consumers League (NCL), the consumer group known for its expertise in fraud, is commending the Federal Trade Commission’s (FTC) fine of $125 million imposed on MoneyGram for failing to police fraudulent transactions.

Under the agreement, the company said it would take steps to crack down on scammers who trick victims into wiring money in schemes that often target grandparents, seniors, and others in phony sweepstakes, lottery, and other scams, including impersonating IRS government officials.

“MoneyGram’s alleged failure to implement key provisions of the order allowed scammers to continue to use its money transfer system to rip off consumers,” said FTC Chairman Joe Simons in a news release. The FTC found that from January to September of this year, 54 percent of government-impostor scams involved the use of a gift card or reloadable payment card.

The following statement can be attributed to NCL’s Executive Director Sally Greenberg:

“MoneyGram is a repeat offender. We hear from consumers every day that the service was used to delivered cash or money on a gift card wired at a scammer’s request. Once that’s done, the funds cannot be recovered. Companies like MoneyGram know how to reduce fraud, but they haven’t taken the steps necessary to do so. Some of the MoneyGram outlets had incidences of fraud at 50 percent of their transactions. We are disappointed at the failure of this company to act responsibly. While NCL works to educate the public, we rely heavily on federal law enforcement to police this type of fraud. We are grateful to the dedicated civil servants at the FTC and the Department of Justice (DOJ) for bringing these cases and holding companies accountable.

As reported in The Washington Post, MoneyGram has agreed to take the following steps as part of the settlement:

• Reported fraudsters will be blocked from using MoneyGram’s transfer system within two days of receiving a complaint identifying those individuals.
• Individuals worldwide will be required to show government-issued identification to send or receive money transfers.
• Money transfers from the United States will be monitored.
• Agents who are found to have processed a high volume of transactions connected to reported fraudsters will be terminated, disciplined or restricted.

If you think you were a victim, the DOJ is directing consumers to MoneyGramRemission.com or providing this number to call: (844) 269-2630. Consumers can sign up for updates that will include how to request compensation.