MoneyGram to Repay $18 Million to Victims of Mystery Shopper Scam and Other Scams

ftc-moneygramA statement released by the U.S. Federal Trade Commission says,

MoneyGram International, Inc., the second-largest money transfer service in the United States, will pay $18 million in consumer redress to settle FTC charges that the company allowed its money transfer system to be used by fraudulent telemarketers to bilk U.S. consumers out of tens of millions of dollars. MoneyGram also will be required to implement a comprehensive anti-fraud and agent-monitoring program.

While this is only a fraction of the money stolen by fraudsters using MoneyGram and Western Union transfers, it is a start. (You can read more about the mystery shopper scam here.)

I spoke to representatives of both Western Union and MoneyGram a while back about what they were doing to prevent fraud. The answer, although they claimed otherwise, turned out to be, “not very much.” It also appears now that, at least in the case of MoneyGram, in some cases their agents were active participants in the scams. According to the FTC:

The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes. According to the FTC’s complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

This settlement not only requires MoneyGram to pay $18 million to be used in consumer redress, they also have to change their practices and more closely monitor complaints and agents involved in questionable transactions.

The agreed-upon court order settling the FTC’s charges bars MoneyGram from knowingly providing substantial help or support to any sellers or telemarketers that are violating the Telemarketing Sales Rule and requires it to implement a comprehensive anti-fraud program. Under the anti-fraud program, MoneyGram must conduct background checks on prospective agents; educate and train its employees about consumer fraud; institute agent monitoring; and discipline agents who don’t comply with the rules. The order also requires MoneyGram to provide a clear and conspicuous fraud warning on the front of all its money transfer forms. The order’s conduct provisions apply to all MoneyGram money transfers sent worldwide from either the United States or Canada.

The order contains monitoring and discipline provisions that will ensure MoneyGram is properly training, monitoring, and taking actions to address problems related to its agents. To do this, the order requires MoneyGram to develop and maintain a system for receiving consumer complaints and data, and to provide that information to the FTC upon request. MoneyGram also must take all reasonable steps to identify agents that are involved in fraud. It must review its transaction data to identify any unusual or suspicious activity by its agents and fire any agent who it believes may be participating in fraudulent activities. It also must fire or suspend any agent who has not taken appropriate steps to stop fraudulent money transfers.

This is certainly good news for those of us who are working to educate the public about these scams. Let’s hope that the actions required by the FTC help in some way to reduce the incidence of this fraud. Unfortunately, fraud will never go away, but if some potential victims are saved from the scammers, it is a victory for the good guys.

If you were a victim of one of these scams, the FTC says you should call 202-326-3755 to learn about claiming redress funds.


    • Cathy Stucker says

      Do not go by the name of the company on the check. It may or may not be the name of a mystery shopping company, but chances are the company on the check is a real, legitimate business. The check, however, is not from them. It is from a scammer. Scammers use name and account information from all kinds of companies. Scammers lie.

      The bottom line is this: If you get a check and are told to cash it and wire money somewhere, it is a scam. It doesn’t matter who sent it to you, it doesn’t matter the amount, and it doesn’t matter what the company name is. If they ask you to wire money, it is a scam. No exceptions.

  1. lady jae says

    this is very interesting..the threats you receive from the person (scammer) sending the check. well you live and learn something new and beneficial. thank God for wisdom and this website full of information.

  2. Chris says

    I just recieved money orders in the mail and I deposited them in my account. I just now recieved an email from a mystery shopping site asking me to send part of the money through money order. I now realize that it is a scam and will not send the money but who should i report this to the bank or the police? Am I going to get in trouble due to this?

    • Cathy Stucker says

      Do not withdraw any of the money from your account, and do not have further contact with the scammers. IMMEDIATELY notify your bank that you were the victim of a scam and the checks you deposited were forgeries. You letting them know is better than waiting for them to find out when the checks bounce. You may also wish to notify the police, but I would start with the bank.

      I’m glad you caught this before you sent money anywhere.

  3. osama williams says

    Hello! I just read to email about this type of scam. Well I found out first hand and now I owe —– —— union $5,000! Needless to say I was stunned it all seemed legit considering I deposited the check and they held it for 14 days and said it was good. Only to find out after I wired the money that it was a scam! This entire process took more than a month to evolve so I was at a loss as to how the credit union didn’t know until after all was said and done! I am still paying for that mistake and it will take me more than 2 years to repay! These types of scammers are some evil S O B’s and they all need to be punished severely!

  4. says

    I have joined the ranks of scam vigilantes. Better known as SCAM BAITERS. This is my way of fighting back after almost being duped in a fake MYSTERY SHOPPING SCAM. I can tell you these scammers are GREEDY, HEARTLESS, And EVIL. They care absolutely nothing about you other than using you to send them money. ALL THEY DO IS LIE LIE AND LIE NEVER BELIEVE A WORD THEY SAY. I get so much pleasure in having them waste time and money sending me FAKE CHECKS I then report the information to authorities and the company they are using. Its the most I can do. THEY DESERVE TO BE TORTURED.

  5. david murphy says

    has anybody got any money back from this its been almost 2 years and i havnt heard anything from anybody about the lawsuit or any repayment!!!

  6. sharon bass says

    I believe the $18 million to repay victims is just a “to make us feel better” scam. I will be repaying my bank $5700 over the next three years.

  7. Terri Masterson says

    I received a USPS Money Order for $990 and told to deposit it and wait a couple days then send $820 via MoneyGram to a person and keep $150 for the assignment and $20 for the expenses of gas, etc. The USPS money order does look legit. How do I find out if this is a real secret shopper assignment? Thank you, Terri

    PS: If it’s not, who should I contact about this. The money order is dated 7/21/16 and I just received it overnight November 1, 2016.

    • says

      It is a scam. Whenever you receive a check or money order this way, it is a scam. There is no legitimate business that sends checks to people who have done no work for them and don’t even have a contractual relationship with them. It is always a scam, no matter who they claim to be or what they say the check is for.

      You can ignore them and destroy the check, or you can report the scam.

      Don’t deposit the check, and do not respond to any messages from the scammer.

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