Over $115M in Refunds Sent to Consumers After FTC, DOJ Charges That MoneyGram Failed to Crack Down on Scams

More than $115 million in refunds are being “sent to consumers nationwide” as a result of a 2018 action the Federal Trade Commission and the U.S. Department of Justice brought against MoneyGram (NASDAQ: MGI) for “failing to crack down on 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.”

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, 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 FTC orders should expect to face similar consequences.”

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, said:

“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. 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.”

Inspector in Charge Christopher A. Nielsen, U.S. Postal Inspection Service, Philadelphia Division, said:

“This $115 million disbursement provides a measure of financial justice for the many victims who were harmed by fraudsters who preyed on them. The U.S. Postal Inspection Service is proud to be part of this exemplary collaborative effort with our law enforcement and regulatory partners, particularly the U.S. Attorney’s Office for the Middle District of Pennsylvania, the DOJ Money Laundering and Asset Recovery Section and the Federal Trade Commission, to facilitate a process where victims are delivered restitution.”

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.”

Consumers receiving refunds in this distribution are those “who submitted claims during the open claims process in 2021.”

The Federal Trade Commission works “to promote competition and protect and educate consumers.”

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