February 11, 2016
(Anchorage, AK) The Department of Law today announced a settlement with MoneyGram Payment Systems, Inc. resolving a multistate investigation involving wire transfers used in schemes to defraud consumers. In addition to Alaska, 48 states and the District of Columbia participated in this settlement.
MoneyGram agreed in the settlement to maintain and continue to improve a comprehensive and robust anti-fraud program designed to help detect and prevent consumers from suffering financial losses from fraud-induced wire transfers. The company will also pay $13 million dollars to fund a nationwide consumer restitution program and for the states’ costs and fees. An independent settlement administrator will review MoneyGram records and send notices to consumers who are eligible to receive restitution under this settlement. Generally, consumers who are eligible for restitution 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.
Fraudsters use a variety of schemes to persuade consumers to wire money. These schemes include “grandparent scams” in which a fraudster contacts a grandparent and falsely claims that money must be wired to assist with a grandchild’s medical or legal emergency, and lottery scams in which consumers are told they have won a large sum of money but must first wire money to pay required taxes or fees before receiving their winnings. The Department of Law’s Consumer Protection Unit urges consumers who receive lottery or sweepstakes solicitations promising huge payouts from strangers to recycle the mailings, delete the e-mails, or hang up the phone. Consumers who are contacted about sending money to a friend or relative in distress in a foreign country should first verify -- from a source unrelated to the initial contact -- that the person actually needs assistance.
More information about the MoneyGram settlement is available at the Settlement Administrator’s website: www.MoneyGramSettlement.com. For information about fraud-induced wire transfers or other scams, please contact the Consumer Protection Unit at (907) 269-5200 or firstname.lastname@example.org, or visit www.law.alaska.gov/consumer.
Consumer Protection Unit