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MoneyGram Payment Systems agrees to $13 million deal over fraud allegations

By Mark Iandolo | Feb 14, 2016

NEW YORK (Legal Newsline) — MoneyGram Payment Systems Inc. has agreed to pay $13 million over allegations of customer fraud, New York Attorney General Eric T. Schneiderman recently announced.

Consumers who utilized MoneyGram’s wire transfer service to send money to third parties complained of fraud schemes. Forty-eight other states and the District of Columbia participated in this settlement along with New York.

“Con artists use a wide variety of schemes that New Yorkers should always be on the lookout for,” Schneiderman said. “As fraudsters continue to innovate and employ increasingly elaborate tactics to scam unsuspecting consumers, businesses must uphold strong anti-fraud practices to protect against those looking to make a quick buck.”

MoneyGram agreed to maintain and improve a comprehensive anti-fraud program. The goal of the program is to prevent consumers from suffering financial losses due to fraud-induced wire transfers.

The $13 million that MoneyGram agreed to will go to the states and be used to fund a nationwide consumer restitution program. The settlement documents note that a third party administrator will review MoneyGram records and send notice to eligible restitution recipients.

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