$13 Million Multi-State MoneyGram Settlement Aimed at Protecting Consumers

PHOENIX - Attorney General Mark Brnovich today announced a $13 million national settlement with MoneyGram Payment Systems, Inc. to ensure safeguards are in place to protect consumers from international wire transfer scams. A multi-state investigation found scammers used MoneyGram’s wire transfer service when conning victims into wiring thousands of dollars to the scammers. In addition to Arizona, 48 states and the District of Columbia participated in this settlement.

“This settlement will help protect Arizona’s seniors from wiring their life savings to scam artists,” said Attorney General Mark Brnovich. “Moving forward MoneyGram will share information with our office and help us block fraud-induced wire transfers.”

Con-artists use a variety of schemes, such as the lottery scam, in which victims are told they’ve won a large sum of money but must first wire money to the scammer to pay the required taxes and fees before receiving their winnings.

The settlement, in the form of an Assurance of Discontinuance, has two main components. First, MoneyGram has agreed 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).

Second, MoneyGram has agreed to pay a total of $13 million to the states, $9 million of that will be used to reimburse consumers. A total amount of consumer restitution that will be paid to Arizona consumers is currently being determined. An independent third-party settlement administrator is currently reviewing MoneyGram records and will send notices to Arizona consumers who are eligible for restitution. Consumers will be eligible for restitution if they previously filed complaints with MoneyGram between July 1, 2008 and August 31, 2009 regarding fraud-induced transfers sent from the U.S. to foreign countries other than Canada.

To protect against wire transfer fraud, Attorney General Brnovich offers consumers these tips:

  • Consumers who receive solicitations from strangers with promises of large winnings should toss the letter, delete the e-mail, or hang up the phone.
  • Consumers who are contacted about a grandchild, friend, or family member in distress should reach out separately to the friend or family members to independently verify that the relative is actually in need of assistance.
  • Never wire money to people you don’t know.   

More information about the MoneyGram settlement is available at the Settlement Administrator’s website: www.MoneyGramSettlement.com

This case was handled by Assistant Attorney General Dena R. Benjamin.

If you believe you have been the victim of consumer fraud, you can file a consumer complaint by contacting the Attorney General's Office in Phoenix at (602) 542-5763, in Tucson at (520) 628-6504, or outside the Phoenix and Tucson metro areas at (800) 352-8431. Bilingual consumer protection staff is available to assist. Consumers can also file complaints online by visiting the Arizona Attorney General’s website at https://www.azag.gov/complaints/consumer.

For additional information, members of the media may contact Mia Garcia, Director of Media Relations at (602) 339-5895 or Mia.Garcia@azag.gov.