(Boise) – Attorney General Lawrence Wasden announced today a settlement with MoneyGram Payment Systems, Inc.  The settlement resolves a multistate investigation into scammers’ use of MoneyGram’s wire-transfer service to defraud consumers.

“Every day my office hears from despondent consumers who have lost money through fraud-induced wire transfers,” Wasden said.  “My consumer education efforts will continue, but the industry must change its business model to deter rather than attract fraudsters.  Today’s settlement attempts to do that.”

MoneyGram agrees to maintain and continue to improve a comprehensive and robust anti-fraud program designed to help detect and prevent consumers from losing money from fraud-induced wire transfers.  The program 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).

MoneyGram also agrees to pay $13 million to the states to fund a nationwide consumer restitution program and to pay the states’ costs and fees.  Idaho will receive $20,000 from MoneyGram for the Attorney General’s costs and fees.

An independent third-party settlement administrator will review MoneyGram’s records and send notices regarding restitution to all consumers who are eligible to receive restitution under this settlement.  Generally, consumers are eligible for restitution if they filed complaints with MoneyGram between July 1, 2008, and August 31, 2009, regarding fraudulent wire transfers to foreign countries other than Canada.

In addition to Idaho, 48 states and the District of Columbia participated in this settlement.  More information about this settlement is available at the Settlement Administrator’s website: www.MoneyGramSettlement.com.

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