Tens of thousands of victims of fraud schemes that used money transfer service MoneyGram are to be compensated to the tune of $115m, according to the US authorities.
Nearly 40,000 consumers will be handed their share of the funds, which were forfeited by MoneyGram in 2018 as part of a deferred prosecution agreement (DPA).
That action was led by the FTC and the Department of Justice (DoJ). It charged that the money transfer giant had violated a previous FTC settlement from 2012 and a DoJ agreement three years later, in which MoneyGram had agreed to crack down on scammers using its service to receive victims’ money.
Specifically, MoneyGram had agreed to put in place a fraud prevention program which required the firm to promptly “investigate, restrict, suspend and terminate high-fraud agents.”
The FTC claimed MoneyGram was aware following the settlement of continued fraud by agents on its payment network, but turned a blind eye.
“MoneyGram violated an FTC order by continuing to let scammers rip off its customers,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
“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.”
Victims will be fully reimbursed for what they lost, with the US Postal Inspection Service (USPIS) managing the process.
The USPIS Philadelphia Division’s Harrisburg, Pennsylvania, office, was heavily involved in investigating the case, while the Money Laundering and Asset Recovery Section’s Bank Integrity Unit and the US Attorney’s Office for the Middle District of Pennsylvania prosecuted the case.
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