FTC orders MoneyGram to return $115m to scammed consumers


The Federal Trade Commission (FTC) has ordered MoneyGram to return $115m in refunds to consumers who were frauded by scammers using their payment system.

The 2018 action charged that MoneyGram violated an FTC settlement from 2009, along with a 2012 DOJ agreement in which the company agreed to take proactive steps to reduce scammers’ ability to use their payment system to receive money from consumers.

In the 2009 settlement with the FTC, MoneyGram agreed to put in place a fraud prevention program which, among other things, required the company to promptly investigate, restrict, suspend, and terminate high-fraud agents.

The FTC charged that MoneyGram was aware of continued fraud on their payment network after the settlement, turning a blind eye for years to numerous instances of suspicious payment activity by the company’s agents.

FTC Bureau of Consumer Protection director Samuel Levine said, “MoneyGram violated an FTC order by continuing to let scammers rip off its customers. The FTC is pleased to be working with our law enforcement partners to provide refunds to claimants. Other firms that facilitate fraud and ignore orders should expect to face similar consequences.”

“This distribution of $115.8 million to nearly 40,000 victims—each of whom is being fully compensated for their losses—demonstrates the Department of Justice’s continued commitment to making victims whole,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This is an example of how the Department will use every tool at its disposal, including in corporate criminal matters, to provide justice to victims.”

Back in September last year, the FTC fined Credit Karma $3m for ‘tricking’ Americans with supposedly false ‘pre-approved’ credit offers.

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