Acting Attorney General John J. Hoffman announced today that New Jersey has joined a multi-state settlement with Texas-based MoneyGram Payment Systems, Inc. that resolves an investigation by the participating states focused on complaints from persons who wired money to third parties engaged in fraud using MoneyGram’s wire transfer service.
Under the settlement, MoneyGram has agreed to maintain -- and continue to improve -- a comprehensive and robust anti-fraud program designed to help detect bogus solicitations and prevent financial loss as a result of fraud-induced wire transfers.
The Dallas-based company also has agreed to pay the 49 participating states and the District of Columbia a total of $13 million, approximately $9 million of which will be used for restitution. New Jersey was among eight states that comprised a multi-state Executive Committee investigating MoneyGram’s efforts to reduce fraud-induced money transfers.
The settlement announced today calls for MoneyGram to maintain an anti-fraud program that is documented in writing and, at a minimum, includes 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 – through which employees and agents can report non-compliance with anti-fraud measures;
· sound mechanisms to evaluate actual fraud rates and consumer losses caused by fraud-induced money transfers, in order to utilize that information to improve compliance;
· continued enhancement of technology solutions, including MoneyGram’s Anti-Fraud Alert System (AFAS);
In addition to its required anti-fraud measures and monetary terms, the MoneyGram settlement provides for an independent third-party Settlement Administrator who will review MoneyGram records and send notices concerning restitution to all persons eligible to receive it under the settlement.
Generally, consumers eligible for restitution under the agreement are those who previously filed complaints with MoneyGram between July 1, 2008 and August 31, 2009. The complaints pertained to fraud-induced transfers sent from the U.S. to foreign countries other than Canada. More information about the settlement is available at the Settlement Administrator’s Web site: www.MoneyGramSettlement.com