Washington, DC (WSYR-TV) - The second-largest money transfer service in the United States has been ordered by the Federal Trade Commission to pay $18 million for allowing its money transfer system to be used by fraudulent telemarketers.
The $18 million to be paid by MoneyGram International Inc. will be used to reimburse customers who were scammed.
The FTC says scammers and con artists used MoneyGram’s agents in Canada to help bilk customers in America. The FTC also says MoneyGram knew its system was being used to defraud people, and did little about it.
The scammers used a variety of schemes:
-Con artists would send consumers letters that they had won a lottery or cash prize. In order to get the money, the victim would have to send in a fee for “taxes,” “customs,” or “insurance.” Once the consumers paid the fee using MoneyGram, they would receive nothing and lose the money.
-In a different scheme, scammers would tell customers they would only have to pay “insurance,” “paperwork,” or “processing” fees for a guaranteed loan. Consumers would send the money in using MoneyGram, and would get nothing.
-The scammers also ran mystery shopper schemes. They would tell victims to use stores such as Wal-Mart to evaluate MoneyGram money transfer operations. Victims would be sent a counterfeit check, and told to deposit it in their checking account. After the deposit, they were then told to take the money and wire it back using MoneyGram. When they wired the money back, the scammer would get the money, and the victim would be told a short time later that the check they deposited was counterfeit. MoneyGram is accused of allowing its agents to pay the money out to the scammers, without checking IDs or by using fake drivers license information.
In a news release, the FTC claims that at least 79 percent of all MoneyGram transfers of $1,000 or more from the United States to Canada over a four-month period in 2007 were fraud-induced.
If you’ve been caught up in one of these scams, you can call 202-326-3755 to file a complaint. You can also head here: https://www.ftccomplaintassistant.gov/
To read the news release from the FTC on this case, head here: http://ftc.gov/opa/2009/10/moneygram.shtm
Read more about these types of scams here: http://www.9wsyr.com/content/news/real_deal/story/Lottery-Scams/kOOMvq6doUGtYercr0GBzQ.cspx
