MoneyGram Agrees to $13M Money Transfer Fraud Settlement

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MoneyGram Payment Systems Inc. will pay $13 million to resolve allegations it transferred money to third parties that defrauded customers, according to a recent announcement by several attorneys general.

The MoneyGram settlement will resolve claims from Washington D.C. and all states except California. The attorneys general from these states reviewed complaints from consumers who used MoneyGram to wire money to third parties who were allegedly involved in fraudulent schemes that caused consumers to suffer financial losses.

MoneyGram, which is based in Dallas, has a global network of around 350,000 locations that allow agents to send and receive money transfers, according to the MoneyGram settlement documents.

The schemes involved third parties who convinced consumers to wire money under false pretenses. For example, the fraudsters would target grandparents and convince them to wire money to pay for a grandchild’s emergency medical care. In other cases, the scammers would entice consumers with promises of romance, business opportunities or foreign lottery winnings. The scammers would take advantage of unsuspecting customers by asking them to wire money to cover fees or to help out with a purported emergency situation.

Under the terms of the proposed deal, MoneyGram will “continue to enhance and maintain a comprehensive and robust anti-fraud compliance program” to protect consumers from fraud. In addition, MoneyGram will improve its consumer complaint process and improve employee trainings.

“MoneyGram and the States are committed to protecting Consumers from fraudulently induced money transfers through a program that includes prominent consumer warnings at locations and platforms offering MoneyGram’s products and services, nationwide consumer education, Agent monitoring, training and remediation of any identified issues, interdictions of high-risk-transfers, and sharing of complaint information with the States,” the MoneyGram settlement documents state.

A portion of the $13 million settlement fund will be used to pay restitution for affected customers who previously filed complaints about fraud-induced money transfers, and who have not already received a payment.

If you or someone acting on your behalf filed a complaint with MoneyGram about a transaction that involved a fraud-induced wire transfer, and you sent the money transfer through a MoneyGram agent based in the United States to a payee located in a different country (except Canada) at any time between July 1, 2008 and Aug. 31, 2009, you may be entitled to restitution from this MoneyGram settlement. California consumers are eligible to receive restitution.

It is expected that eligible consumers will receive a full refund. However, the actual amount each claimant will receive depends on the total number of claims filed and the total dollar amount claimed.

MoneyGram does not admit any liability but agreed to settle the fraud allegations to resolve the concerns of the attorneys general and to provide restitution to affected consumers.

More information about the MoneyGram settlement is available at www.MoneyGramSettlement.com. It is estimated that the Settlement Administrator will contact eligible consumers before June 1, 2016.

Instructions on how to file a claim for the MoneyGram settlement were not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.