Mad as Hell at Moneygram and the FTC

May 6th, 2010. By AbiK

I’m having a “Network” moment—for those of you old enough to recall the classic cult flick.

I just read another comment from a reader whose father—only YESTERDAY—was the victim of a Moneygram scam. It was your run-of-the-mill scam story. Someone in Canada calls to tell Dad that his son was in a car accident. And, unfortunately, son didn’t buy the rental car insurance. They need $3,000 or they will detain son and he won’t make flight home. They need the money now. Via Moneygram.

Dad sends the cash. Dad then calls son’s cell phone. Dad finds out truth. Dad not happy. Dad files complaint with Moneygram—and gets a bit of a brush off as he tries to glean any info about the situation. Kudos to the Moneygram Customer Service Department (sarcasm dripping from my fingertips). Dad also files a police report. Dad does most everything he’s supposed to. (You can read my post on what to do if you’ve been Moneygram scammed). Only other thing he should do is…

File a complaint with the FTC at ftc.gov or at 1-877-FTC-HELP.

And here’s what ticks me off.

Only last week the FTC began mailing out the over 34,000 redress checks—on average $520 per victim—to close the loop on the Moneygram fine the FTC ordered Moneygram to pay. But keep in mind, the redress checks—and the FTC’s fine—only applied to folks who were victimized during the years 2004-2008. It’s 2010. And it’s still happening.

It was only this past February we’d posted about the $18 million fine that Moneygram was ordered, in October ’09, to cough up to the FTC to help offset the losses—to the tune of $84 million—that victims unwittingly lost in Moneygram scams. That post also included the list of things that the folks at Moneygram were supposed to enact to help stop Moneygram fraud. That list, to refresh your memory, stated that Moneygram was to:

• Not knowingly provide substantial help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule.
• Implement a comprehensive anti-fraud program, that includes background checks on prospective agents; consumer fraud education and training for Moneygram’s employees; agent monitoring; and disciplinary action for those agents who do not comply with the rules.
• Provide a clear and conspicuous fraud warning on the front of all its money transfer forms.
• Develop and maintain a system for receiving consumer complaints and data, and to provide that information to the FTC upon request.
• Take all reasonable steps to identify agents who are involved in fraud. This means Moneygram must review its transaction data to identify any unusual or suspicious activity by its agents and fire any agent who it believes may be participating in fraudulent activities; additionally, Moneygram must fire or suspend any agent who has not taken appropriate steps to stop fraudulent money transfers.

 

You can read the entire stipulated order—you’ll find its intent is certainly to have Moneygram toe the line.

However, here we are, seven months out from when the FTC ordered Moneygram to pay up and put some stopgap measures in place, and people are still being scammed via Moneygram.

Clearly, Moneygram’s been real effective at starting to put consumer protection measures in place. Swiss cheese apparently has nothing on the holes in Moneygram’s operations.

Another thing that ticks me off—the fallback line on scams like this is always that the victims should have known better. Ok, if someone calls to tell me I’ve won $650,000 but, gee, I need to send in $2,500 first, I raise an eyebrow. But when you’re told there’s an issue with a family member, it’s a different story. Emotion takes over and the scammers know it. And Moneygram damn well does, too.

I’ve never used Moneygram, so I can’t speak firsthand on the process. But clearly, someone, somewhere in Moneygram’s transaction fulfillment process should be seeing some red flags going up. Hmm…let’s see…

Given sites like Spokeo.com, there’s clearly enough info available about folks ordering Moneygrams. Do you think there could be a quick check in place–though I realize it’s a bit like profiling (egads!)–where when an individual who is elderly is placing an order to send money to Canada…. You get where I’m going. Maybe put a delay in place. Maybe make a customer service call to follow up. Gee, how many of you have received a call from your credit card company to double-check on a transaction that seems out of your usual purchasing patterns? It’s a little thing called Fraud Protection. Clearly Moneygram hasn’t heard of it.

And folks wonder why we need so many lawyers.

My advice, if you’ve been victimized by a Moneygram scam (regardless of who the real perpetrator is), talk to a lawyer and see what kind of case you might have. Otherwise, you can file your complaints and….

Tags: FTC, moneygram, Moneygram Scam

This was posted on Thursday, May 6th, 2010 at 11:22 am and is filed under Consumer Fraud . Feel free to respond, or trackback. Read our comments policy.