INDIANAPOLIS, Ind. – Indiana Attorney General Greg Zoeller Tuesday announced a settlement with MoneyGram Payment Systems, Inc. resolving a multistate investigation which focused on complaints of consumers who used MoneyGram’s wire-transfer service to send money to third parties involved in schemes to defraud consumers.
In addition to Indiana, 48 states and the District of Columbia participated in this settlement.
As part of the settlement, MoneyGram will pay a total of $13 million dollars to the states to fund a nationwide consumer restitution program and pay for the states’ investigative costs and fees. An independent third-party settlement administrator will review MoneyGram records and send notices regarding restitution to all consumers who are eligible to receive restitution under this settlement and who have not previously received refunds from MoneyGram.
Generally, consumers who are eligible for restitution previously filed complaints with MoneyGram between July 1, 2008 and Aug. 31, 2009 regarding fraud-induced transfers sent from the U.S. to foreign countries. This time period was prior to MoneyGram’s implementation of a comprehensive anti-fraud compliance program that has since helped deter fraud.
While this restitution program is limited, Zoeller said, the settlement is an important reminder that con artists remain active and continue to victimize citizens using these methods. Zoeller is focused on educating consumers about tactics of fraudsters to prevent this abuse. In 2015, Zoeller’s Outreach Division held 630 consumer education events and reached nearly 42,000 people.
“Hoosiers gave scam artists more than a million dollars last year, and a majority of this money was sent by wire transfer or using pre-paid cards, which are methods preferred by scammers because they are instant payment transfers and hard to track,” Zoeller said. “MoneyGram continues to take steps to reduce this fraud perpetrated using its services and this is important progress to better protect consumers, but people must remain vigilant about these scams and never send money to unknown callers.”
MoneyGram has also agreed as part of the settlement 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; and
- Continued enhancement of technology solutions, including its Anti-Fraud Alert System (AFAS).
Fraud-induced transfers can take many forms. Zoeller warned the public of the following common third-party schemes often conducted using wire transfer or pre-paid cards:
- IRS/government impersonation scheme – a fraudster calls claiming to be with the IRS or a similar government agency and demands immediate payment of past-due taxes.
- Grandparent scheme – a fraudster calls a grandparent claiming that money is urgently needed and must be wired to assist with a grandchild’s emergency (e.g. emergency medical assistance, travel money or bail money).
- Lottery/sweepstakes scam – a fraudster tells the consumer that he or she has won a lottery or contest but must wire money to cover “fee” “taxes” or other charges.
- Romance scam – a fraudster creates a fake online profile using someone else’s picture – sometimes even using stolen pictures of real military personnel. Once they make contact with a prospective victim, they quickly profess love and proceed to ask that money be wired to them – because their wallet was stolen or they have some other heart tugging emergency.
- Tech support scam – a scammer calls or emails you claiming that they are from Windows, Microsoft or another software company and that your computer is running slow, has a virus or sending out error messages; they request payment to “fix” these issues.
- Employment and business opportunity scams – scammers offer work at home opportunities, such as mystery shoppers, but require that the consumer first wire money to them.
The Attorney General’s Consumer Protection Division received more than 3,400 complaints from people who were targeted or fell for a scam in 2015.
Zoeller recommends the following tips to avoid fraud:
- Do not do business with incoming callers. Only do business when you initiate the call using a number you have in your records for the company, not that was left on caller ID or given to you by someone else.
- Indiana’s Do Not Call law should eliminate legitimate telemarketing calls to your home. If you are receiving sales calls and are on the Do Not Call Registry, you should be suspicious and not provide any information. To register or confirm your phone number is on the Do Not Call list visitwww.IndianaConsumer.com or call 888-834-9969.
- Do not feel pressured to make quick decisions. Take time to research any offers or demands, ask trusted relatives and friends their opinions before making a decision.
- Call your local Better Business Bureau or the Attorney General’s Office (800-382-5516) to find out if complaints have been filed about a company before doing business with it.
- When making any types of payments, credit cards offer the best insurance against fraud.
Zoeller thanked Deputy Attorney General Dave Paetzmann for his work on this case.
More information about this settlement is available at the Settlement Administrator’s website:www.MoneyGramSettlement.com.
For more information about common scams and how to protect yourself, visit the Attorney General’s website here. To file a complaint with the Attorney General’s Office, visit www.IndianaConsumer.com or call 800-382-5516.
