MoneyGram to pay $13 million to end money transfer probe
MoneyGram International Inc will pay $13 million to settle an investigation by U.S. states stemming from customer complaints that scam artists duped them into wiring funds via the money transfer service, state attorneys general said on Thursday.
The settlement with attorneys general in 49 states and Washington, D.C., includes $9 million for a nationwide fund that will facilitate the return of money to some MoneyGram customers and $4 million to cover states' costs and fees, according to numerous announcements by state attorneys general on Thursday.
MoneyGram, based in Dallas, must also improve fraud-detection measures, the statements said. The company has a global network of approximately 350,000 locations where money transfers are sent and received.
"We are pleased to put the matter behind us," a MoneyGram spokeswoman said in a statement.
MoneyGram had previously set aside funds for the settlement, which will not affect its income for the 2015 fourth quarter or 2016 projections, the company said in announcing its 2015 financial results on Thursday.
The probe focused on complaints from consumers who used MoneyGram’s wire-transfer service to send money to third parties who were, in fact, con artists, state attorneys general said.
Frauds targeting consumers included lottery scams and so-called “grandparent scams,” in which con artists trick grandparents into sending money by claiming their grandchildren are in trouble.
As part of the settlement, MoneyGram has agreed to provide more training for its agents so they will be better prepared to detect possible frauds. The company must also, among other measures, operate a hotline through which employees and agents can report violations of its antifraud policies, according to attorneys general.