Indiana and Other States Reach Agreement with Wire Transfer Company

Tag : Used Wire

(INDIANAPOLIS, IN)  Indiana Attorney General Steve Carterannounced today that MoneyGram Payment Systems, Inc., has enteredinto an Assurance of Voluntary Compliance (AVC) with Indiana and 43other States and the District of Columbia, in response to concernsabout the use of the companys wire transfer services by fraudulenttelemarketers. Under the agreement, MoneyGram will, among otherthings, fund a $1.1 million national consumer awareness program andprominently place consumer warnings on wire transfer forms used byconsumers.
To keep perpetrators from defrauding consumers, we need to make itharder for them to utilize traditional methods of transferringmoney, said Carter. Agreements like this one, with its modelfraud warning, consumer education program, and enhanced trainingfor money transfer agentsare steps in the right direction.
Minneapolis-based MoneyGram, offers money transfer services by wireat over 25,000 locations in the United States and over 100,000locations around the world, including grocery stores, gas stationsand other retail businesses.
The problem addressed by the AVC is the high number offraud-induced transfersthat is, money wired by consumers tofraudulent telemarketers and other scam artists. For example, sometelemarketers, often based in other countries, use a lotteryscam, in which they tell consumers they have won a large sum ofmoney but must pay taxes or other charges in order to claim thewinnings. The victims are then directed to send the money by wire,because wire transfers are fast, there are transfer agents in mostcommunities, and funds can be picked up in multiple locations.
In 2003, a survey conducted in seven states of transfers over $300to Canada by another major money transfer company estimated thatover 29 percent of those transfers were fraud-induced, resulting inconsumer losses in the year 2002 of approximately $113 millionnationally.

The terms of the AVC include:
-Prominent warnings in English and Spanish on the dangers offraud-induced wire transfers must appear on the front page ofMoneyGrams Send Form and occupy at least 40 percent of the space.Comparable warnings are required for telephone and Web transfers.
-Pay $1.1 million toward a national consumer education program onavoiding fraud-induced transfers overseen by the AARP Foundation.
-MoneyGram will continue its current policy of reimbursing theamount of any transfer to a consumer who requests, prior to pickup,that the transfer be stopped, and reimbursing transfer fees as wellif the consumer reasonably claims that the transfer wasfraud-induced.
-Enhanced employee training and use of electronic anti-fraudmessages to MoneyGram agents every month or whenever a proposedtransfer exceeds a certain amount.
-Take appropriate action to suspend or terminate agent locationsthat are involved in fraud or that do not take reasonable steps toreduce fraud.
-Block wire transfers from specific consumers or to specificrecipients when the company receives information from a state thatthere are good faith grounds to believe that fraud will occur.

Signing the AVC were the States of Alabama, Alaska, Arizona,Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho,Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,Maryland, Massachusetts, Michigan, Minnesota, Mississippi,Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont,Virginia, Washington, West Virginia and Wyoming, and the Districtof Columbia.