News from MoneyGram

Here is a press release from MoneyGram

MINNEAPOLIS, Jul 12, 2010 (BUSINESS WIRE) —

MoneyGram International (NYSE: MGI), a leading global payment services company, has introduced state-of-the-art technology to better protect its customers and agents from fraud. The enhanced technologies, which layer in protection through identification of suspicious transactions, computer and behavioural authentication and anti-phishing capabilities, are already dramatically reducing third-party consumer fraud at agent locations and online.

“MoneyGram takes fraud very seriously,” said Dennis Wildsmith, vice president of transaction services and fraud prevention at MoneyGram. “We have established systems and processes to enhance safe and reliable money transfers, train our agents and employees about fraud, and to educate consumers on ways to safeguard  their money. These new technologies are one more step in creating a world-class consumer anti-fraud program.”

As part of the new measures to combat fraud, MoneyGram has implemented a solution called Global Compliance that identifies suspicious or high-risk transactions based on established criteria. Global Compliance helped prevent more than 1,000 customers from losing funds to fraud during its first 50 days. In addition, MoneyGram reduced internet purchase fraud by 30 percent during this same period.

The system scans each transaction looking for signs of fraud, and suspicious transactions are put on hold until the company can confirm if a transaction is legitimate or fraudulent. Global Compliance rules were developed specifically by MoneyGram, offering the company the flexibility to modify the rules as needed in order to respond more quickly to new and different kinds of fraud. Today, the tool is monitoring all send transactions from Canada and the United States to anywhere in the world.

“These are some of the multiple steps that will significantly increase our ability to mitigate fraud around the world,” said Wildsmith. “We’re already seeing positive results. Since its implementation, the system has been effective at stopping thousands of fraudulent transactions in the U.S. alone. Our goal is to have the system integrated with all point-of-sale equipment within two years, giving MoneyGram’s global agents the ability to more effectively identify suspicious transactions and better enforce anti-fraud and anti-money laundering processes to protect consumers.”

MoneyGram has instituted another step to protect its customers through a process that identifies individual consumers – who have made or attempted to make transactions that are known to be fraudulent – being victimized by scams. MoneyGram’s new fraud solutions build on efforts already in place to mitigate fraud at the point of transaction. These include warnings on MoneyGram send forms for the customer to answer before sending money and agents verbally alerting customers when they see possible fraud taking place.

To further protect consumers, the company has also implemented an RSA Fraud Intelligence Solution, an anti-phishing tool that prevents cyber criminals from compromising agent computers and stealing customer information. The solution provides user and computer authentication technologies to prevent fraud from the point of login through completion of the transaction. RSA’s technology also conducts behavioural monitoring – flagging transactions for review if a customer suddenly changes his/her pattern in making transfers.

Additionally, MoneyGram, a leading money order provider, has also redesigned its money orders to provide more highly visible safeguards against counterfeiting – the number one type of fraud for this kind of payment. The redesign incorporates visual and physical features that are easy to see on the front of each money order, not easy to replicate and contains an additional call to action for the recipient of a money order to verify its validity.

Counterfeit Cashier’s Checks and MoneyGram

I am currently working with a lawyer who is interested in speaking to victims of counterfeit cashier’s check scams who wired money using MoneyGram.  Please contact me if you would be willing to speak with this lawyer.  If this turns into a case, it could be a huge break for victims of these scams.

Do not post your contact info here . . . if you do not already have my contact information, you can find me through http://www.retaggr.com/page/ShawnMosch

More on MoneyGram

I read a press release stating that MoneyGram is now available in over 6,000 Candada Post Locations.

I sure hope that they do some better training of their staff at these locations, and monitor them more closely than they did their other Canadian locations.  What am I talking about?

The FTC charged that between 2004 and 2008, MoneyGram agents helped fraudulent telemarketers and other con artists who tricked U.S. consumers into wiring more than $84 million within the United States and to Canada – after these consumers were falsely told they had won a lottery, were hired for a secret shopper program, or were guaranteed loans. The $84 million in losses is based on consumer complaints to MoneyGram – actual consumer losses likely are much higher.

The FTC charged that MoneyGram knew that its system was being used to defraud people but did very little about it, and that in some cases its agents in Canada actually participated in these schemes. According to the FTC’s complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada; a similarly small number of agents was responsible for more than 96 percent of all fraud complaints to the company in 2006.

You can read the entire press release here.

Wire Transfers

So many of the online scams involve the scammer sending a counterfeit cashier’s check or money order, asking the victim to wait for it to “clear” and then wire a portion of the money on to someone. The scammers make up all kinds of stories to make the reason for having to wire money to someone else make sense, and of course since the bank has already told you that the check is “clear” you feel like there is nothing to worry about.

Did you know this . . . when you wire money to someone, even if you write on the documentation that the wire transfer is to be picked up in Detroit, Michigan if the scammer has the test/security question and answer along with the wire transfer information then they can pick up the money at any location in the world . . . like Lagos, Nigeria.

These test or security questions are a feature put in place for emergency situations, when the person picking up the money has lost their photo id, which is normally needed to pick up a wire transfer. But if you give the scammer the test/security question information that is how they bypass the need for a picture id when picking up the money. This happens every day on sites like Craigslist. The scammer will pretend to be within the United States so as to not raise any red flags with the potential victim by mentioning that they are really in Nigeria.

With so many scams using wire transferring services like Western Union and MoneyGram we at Scam Victims United would like to see these companies increase their security by making it mandatory that the money must be picked up in the destination zone. If the documentation filled out by the customer says that the money is going to Detroit, Michigan, then the money should not be able to be picked up outside of the state of Michigan, no matter what information the person picking the money up has. This would help to reduce the number of scams going on because the scammers would then have to tell the victims to wire the money to Nigeria for them to be able to pick it up, and with so many people this would be a red flag because of the information about Nigerian scams.

In addition, wire transferring services could have a Fraud Alert posted in their store locations, and when anyone does fill out a wire transfer form and indicates Nigeria as the destination for the money to be picked up they could point out the Fraud Alert or have the customer sign a secondary document saying that they are aware that there are many internet scams coming out of the country of Nigeria which involve receiving a cashier’s check or money order and then wiring money.

Since we cannot go to other countries and arrest the people running these scams we must do as much as we can to provide the correct information to the American public to educate them about these scams. This means that everyone must do their part, including the wire transfer services that the scammers use as a part of their business. I would like to propose laws that would require wire transfer services to implement and follow such security measures.

Education is the key to fighting scams, and that is why we are also asking for scam education and awareness programs. To read more about this please go to http://www.change.org/actions/view/create_scam_education_and_awareness_programs

Money Transfers

http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt034.shtm

Money Transfers Can Be Risky Business

You’ve won a prize!
I’m in a foreign country, and I need cash.
We’re temporarily unable to accept credit cards.
Your dream apartment is available immediately at an incredible price!

Scam artists use a number of elaborate schemes to get your money, and many involve money transfers through companies like Western Union and MoneyGram. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, money transfers may be useful when you want to send funds to someone you know and trust — but they’re completely inappropriate when you’re dealing with a stranger.

Why do scammers pressure people to use money transfers? So they can get their hands on the money before their victims realize they’ve been cheated. Typically, there is no way you can reverse the transaction or trace the money. Another reason: When you wire money to another country, the recipient can pick it up at multiple locations, making it nearly impossible to identify them or track them down. In some cases, the receiving agents of the money transfer company might be complicit in the fraud. Money transfers are virtually the same as sending cash — there are no protections for the sender.

Many money transfer scams involve dramatic or convincing stories that play on your optimistic nature, your altruism or your thriftiness. But no matter how you parse it, they always cost you money. Here are some scams involving money transfers that you may recognize:

Counterfeit Check Scams

Someone sends you a check with instructions to deposit it and wire some or all the money back. By law, banks must make the funds from deposited checks available within days, but uncovering a fake check can take weeks. You are responsible for the checks you deposit, so if a check turns out to be fraudulent, you will owe the bank any money you withdrew.

Counterfeit check scams have many variations:

Lotteries and Sweepstakes: You just won a foreign lottery! The letter says so, and a cashier’s check is included. All you have to do is deposit the check and wire money to pay for taxes and fees. Oops: The check is no good. Although it looks like a legitimate cashier’s check, the bank eventually will determine that it is a fake. The lottery angle is a trick to get you to wire money to someone you don’t know. If you deposit the check and wire the money, the check will bounce — and you’ll be responsible for the money you sent.

Overpayment Scams: Someone responds to your posting or ad, and offers to use a cashier’s check, personal check or corporate check to pay for the item you’re selling. At the last minute, the so-called buyer (or the buyer’s “agent”) comes up with a reason to write the check for more than the purchase price, and asks you to wire back the difference. The checks are counterfeit, but very often, good enough to fool bank tellers. Acting in good faith, you deposit the check and wire the funds back to the “buyers.” Oops: the check bounces. You are liable for the amount you wired.

Mystery Shopper Scams: You are hired to be a mystery shopper and asked to evaluate the customer service of a money transfer company. You’re given a check to deposit in your personal bank account. Then, you’re told to withdraw the amount in cash and wire the money using a certain money transfer service. Often, the instructions say to send the transfer to a person in Canada or another foreign country. You’re then asked to evaluate your experience — but no one collects the evaluation. Oops: the check you deposited bounces. You are responsible for the money you withdrew.

Don’t wire money to:

  • a stranger — in this country or anywhere else
  • someone claiming to be a relative in a crisis — and who wants to keep their request for money a secret
  • someone who says a money transfer is the only form of payment that’s acceptable
  • someone who asks you to deposit a check and send some of the money back

Other Money Transfer Scams

Online Purchase Scams: If you are buying something online and the seller insists on a money transfer as the only form of payment, consider it a red flag: ask to use a credit card, an escrow service or another way to pay. No matter what story the seller tells you, insisting on a money transfer is a signal that you won’t get the item — or your money back. Find another seller.

Advance Fee Loans: Ads and websites that guarantee loans or credit cards regardless of your credit history may be tempting. The oops moment is when you apply for the loan or credit card and find out you have to pay a fee in advance. If you have to wire money for the promise of a loan or credit card, it’s likely you’re dealing with a scam artist.

Family Emergency Scams: You get a call out of the blue from someone who claims to be a member of your family and needs cash to get out of a jam — to fix a car, get out of jail or leave a foreign country. He begs you to wire money right away and to keep the request confidential. Check it out with your family. It’s likely they know nothing about it. If you absolutely, positively cannot ignore the request, try to verify the caller’s identity by asking very personal questions a stranger couldn’t possibly answer. And keep trying to reach the family to check out the story.

Apartment Rental Scams: Some scammers hijack bona fide rental or real estate listings by changing the email address or other contact information, and placing the altered ads on other sites. Other rip-off artists make up listings for places that aren’t for rent or don’t exist, and try to pique your interest with the promise of below-market rent. But once they have your attention, a skilled scammer asks you to wire an application fee, a security deposit or the first month’s rent. It’s never a good idea to send money to someone you’ve never met for an apartment you haven’t seen. If you can’t meet in person, see the apartment or sign a lease before you pay, keep looking.

If you’ve wired money to a scam artist, call the money transfer company immediately to report the fraud and file a complaint. You can reach the complaint department of MoneyGram at 1-800-MONEYGRAM (1-800-666-3947) or Western Union at 1-800-448-1492. Ask for the money transfer to be reversed. It’s unlikely to happen, but it’s important to ask. Then, file a complaint with the FTC. Visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.govor call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

MoneyGram class action

Last week I wrote about MoneyGram and the FTC, and how the FTC has found that MoneyGram knew that it’s money transfer system was being used to defraud and scam people out of their money, and did very little about it.

Since then I have been contacted by a consumer rights attorney in California and he would like to bring a claim against MoneyGram to get money back to scammed consumers.

If you know of anyone in California that was scammed by MoneyGram, please have them contact me so that I can get them in touch with this attorney. He is willing to help the victims and work on contingency.

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
There is strength in numbers!

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