February 10th, 2010. By AbiK
Many of you have written in about Moneygram scams. Unfortunately, in the aftermath of Moneygram’s court order to cough up $18 million to the FTC to settle charges of consumer fraud, we’re still receiving numerous accounts from readers who’ve been on the receiving end of a Moneygram scam and who are asking what they should do.
For background, the FTC had sued Moneygram, charging that agents from the money transfer service helped fraudulent telemarketers and con artists who tricked consumers into wiring in excess of $84M within US and Canada. The fraudulent activity occured between 2004 and 2008. The $84M in losses was based on consumer complaints that Moneygram received—and the FTC estimates that the figure is actually larger (i.e., not all victims would have filed a complaint with Moneygram).
First, the court order, from last October, is requiring Moneygram to not only pay the $18 million to the FTC—which is to be used to provide redress to consumers—but also requires Moneygram to do the following:
- 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.
That’s all lovely of course, but what do you do if you’ve been the victim of a Moneygram scam?
If you’ve lost money in a Moneygram scam, here’s what to do:
- If you have already filed a complaint with Moneygram, there is no need to do anything further at this time.
- If you have NOT filed a complaint with Moneygram, you need to do so. Call Moneygram at 1-800-Moneygram to file your complaint.
- The FTC is working on developing a refund program to appropriately distribute the $18M, however, given that the settlement is capped at $18M, the FTC is alerting consumers to that fact that they will only be eligible for a partial refund (i.e., so don’t expect to recover all monies you may have lost as a result of the scam).
- If you do participate in the refund program, you will not give up your legal rights (translation: you can still pursue legal recourse).
We’ll keep monitoring the situation, but you can also call the FTC for updates as well at 202-326-3755.