MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to cheat U.S. consumers out of tens of millions of dollars. MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.
The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada. These consumers were falsely told they had either won a lottery, were hired for a secret shopper program, or were guaranteed loans. While the $84 million in losses is based on consumer complaints to MoneyGram, actual consumer losses likely are much higher. The FTC charged that MoneyGram knew that its system was being used to defraud folks, but did very little about it. In some cases its agents in Canada actually participated in these schemes, according to the FTC.
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