MoneyGram and Nigeria

On June 8th, 2010 MoneyGram released the following information. Because I feel so strongly about this topic, I would like to share the entire press release with you, along with my personal thoughts on it.

MINNEAPOLIS, Jun 08, 2010 (BUSINESS WIRE) –MoneyGram International (NYSE:MGI), a leading global money transfer company, announced today that First Bank of Nigeria Plc has selected MoneyGram to provide money transfer services in its more than 500 locations across the nation. First Bank, established in 1894, is Nigeria’s oldest bank and one of the largest in terms of network size. First Bank has locations in all key cities including Abuja, Benin, Lagos, Iabdan, Port Harcourt, and Warri as well as a significant presence in rural Nigeria, some operating 24 hours a day, seven days a week, making MoneyGram services even more convenient for Nigerians.

Is this really what we need?  for Money Gram services to be even more convenient for Nigerians?  I feel that it is pretty convenient for them just as it is.  Actually it is way TOO convenient for them to pick up money that people receive from counterfeit cashier’s checks, or for fake Secret Shopper jobs or that people believe that they are sending to someone within the United States.

“MoneyGram, which has operated in Nigeria since 1998, saw significant growth between 2006 and 2008 when it tripled its network in the country,” said Vicky Johnston, MoneyGram’s senior regional director for Anglo Africa and Middle East. “We are excited about partnering with First Bank as it is MoneyGram’s most recent and significant expansion which will allow us to provide a service to so many more people through the bank’s large number of branches.”

Ironically, during the same time period that MoneyGram increased it’s network in the country, the number of money lost to scams and fraud also increased.  You can see the increase on the chart below which is from the Annual Report put out by the Internet Crime Complaint Center (IC3.gov)

To commemorate the agreement with First Bank Plc, MoneyGram’s Chairman and CEO, Pamela H. Patsley is in Nigeria and will attend the official launch event scheduled for today. During her visit, Patsley will address the media as well as CEOs of MoneyGram’s agent banks in Nigeria, discussing the common goal of bringing needed financial services to the people of Nigeria and the growth opportunities there.

I have a better idea . . . what about discussing the common goal of fighting all of the scams and fraud that pass through MoneyGram every day, and how they can do more to save those customers from becoming victims.  Before we start looking at the financial needs of the people of Nigeria, I think we need to protect the financial needs of the people right here in the United States. 

“MoneyGram is pleased to partner with First Bank,” said Patsley. “Our partnership will help to ensure that our services are accessible and convenient for the people of Nigeria and that we can continue to meet the growing demand of consumers in this important remittance market.”

And why are their demands growing?  Because there are more and more scams going undetected or people just turning a blind eye to them. 

Nigeria, Africa’s most populous nation, is ranked in the top 10 receive countries for money transfers. The World Bank estimates that $10 billion USD in remittances was sent to Nigeria in 2009 – with the United States being the primary send country. Other top send countries include Canada, Germany, Israel, Italy, Liberia, Libya, Malaysia, Spain, South Africa and the United Kingdom.

That is because Nigeria is also ranked in the top 3 countries for money wire transfer scams.  The other countries would be Canada and the United Kingdom, who are also ironically on the list above.  I wonder hom much of the $559.7 million dollars from the chart above that went out of this country in scams is directly a part of the $10 billion reported to be going into Nigeria in 2009? 

With the First Bank agreement, MoneyGram now has a total of eight bank relationships, thus further proving that MoneyGram is dedicated to providing reliable and safe money transfer services to Nigerians – wherever they may reside. Furthermore, agent banks in Nigeria have brought a positive experience to the remittance business with their individual pedigree in banking, service quality delivery and branch network, which provides a sense of ease for those receiving funds from family members working in other countries.

So we are going over and above to make sure that Nigerians have a reliable and safe money transfer service, but we are doing very little to offer that same kind of safety to the MoneyGram customers in the United States.  The last sentence in the above paragraph really gets me . . . . which provides a sense of ease for those receiving funds.  Why is it that we seem to care more about the people in another country, who are one of the main sources of these scams, than the people here in the United States that they are scamming? 

Shawn Mosch
Co-Founder of ScamVictimsUnited.com
 
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Why do scammers love Craigslist?

Many websites have become infested with scammers, but Craigslist seems to be one of the places that the scammers really love to hang out. Why is that?

Variety of categories – In the past, when a scammer wanted to find a victim for their overpayment scams they had to go to a website were people were selling items, usually of large value. If they wanted to find a victim for an employment scam, they had to go to a site where people were posting their resumes. If they wanted to find a victim for a romance or dating scam, they would have to go to a dating website. If you wanted to find a victim for renter or roommate scam, you had to go to a site where people were posting housing information. With Craigslist, you can find all of those people in the different categories on the same site.

Includes the entire country – There are other classified ad sites that would have the same variety of categories that Craigslist has, but they are usually for a certain geographic location. If the scammer wants to try and find more victims, they would have to go to another classified ad site that is targeted towards another geographic location. With Craigslist all the scammer has to do is click on a new city and state for their search location and they have a entirely different group of victims to try and bring into their scam.

It’s free – Not only is Craigslist free for people to post or creating listings, but it is also free to people looking at those listings. This works to the scammer’s advantage. If the scammer is the one placing the listing, for a Secret Shopper job for example, they do not have to pay anything to place that advertisement. Many of the sites that require you to pay to post have a lower number of scams posted simply due to the fact that the scammer is there to make money, and not to spend it. It works the other way too . . . if the scammer is the one searching the posted ads for their next victim, they do not have to pay anything to have access to those listings.

Craigslist does have warning information on their site, and I think that some of their warnings should hold true if you are using their site or another classified ad site.

Deal with local buyers and sellers. If you sell your item and you need to have it shipped someplace you are taking a greater risk. If you deal locally, you can arrange to meet the person face to face to exchange money and the item for sale.

Never wire funds to someone you only know via email conversations. Scammers use services like Western Union and MoneyGram in their scams because they know that once the money is wired off and picked up on the other end there is no way to recover the money. Also, since they are overseas, our law enforcement in the United States cannot just go and pick them up for taking your money. It becomes an issue for the government and law enforcement in the country that they live in. This all goes back to jurisdiction, which we talked about in the past, and you can review here.

One thing that I think that Craigslist could add to their posted warning is that a cashier’s check could take 10 business days or more to go through the clearing process. Just because you take the check to the bank and they tell you that it has cleared, or that it will be verified as good in 24 hours does not mean that the bank knows for sure that this check was written on a good account and has the funds in that account to cover the check. This is the information that is missing from so many of the current internet scam warnings, but is also the piece of information that could save so many scam victims. So why don’t the places that post the warnings understand this and include this information? Personally, I feel it is because they are thinking as a “business” and not as a scam victims, and that is one thing that I can do since I have been there myself.

Had we known back in October of 2002 that the check could take up to 10 business days to go through the entire clearing process and that until that happened we would be liable for the entire amount of the check, then there is no way we would have wired any money off any sooner than 10 business days . . . actually, my husband and I had promised each other that what ever amount of time the bank said to wait to be safe we were going to double to be extra safe, so like I said, if they would have been honest with us there is no way we would have become scam victims.

Consumer Federation of America

This Press Release was from May 27, 2009

http://www.consumerfed.org/pdfs/Fake_Check_PR_5-27-09.pdf

 

CFA Task Force Aims to “Tear Up” Fake Check Scams

 

Survey Shows Over a Million Consumers are Being Swindled

 

Washington DC – Today, the Consumer Federation of America is launching a national campaign to combat fake check scams.  Millions of consumers are lured into accepting genuine-looking checks and money orders and wiring money to crooks in return.  According to the results of a CFA survey, nearly one third of adults have been approached with fake check scams and at least 1.3 million have become actual victims. With an average loss of $3,000 to $4,000 per consumer, billions of dollars have been pocketed by fake check scammers. “In today’s economy, as consumers struggle to make ends meet, vulnerability is at an all-time high. Phony claims of sudden riches or ways to make money have never been more attractive,” said Susan Grant, CFA’s Director of Consumer Protection. CFA created a Fake Check Task Force to help raise awareness about these scams and protect consumers.

 

The telephone survey of 2,000 adults conducted for CFA by Opinion Research Corporation December 4-8, 2008 revealed that the most common fake check scams are those involving sweepstakes/lotteries (66 percent), grants (36 percent) and work-at-home opportunities (35 percent). In the sweepstakes and grant scenarios, the consumer receives a check or money order with instructions to wire a portion of the money to pay taxes or administrative fees. In the phony job offers, consumers are asked to process payments for a foreign business or make purchases as a mystery shopper and wire the remaining money to their employer minus their “pay.” Another popular variation of the scam is the “overpayment,” where the scammer offers to buy something the consumer has advertised for sale, sends a check or money order for more than the asking price, and tells the consumer to wire the extra to someone who will arrange for shipping.  

 

         “The check or money order is phony, and so is the person’s story,” explained Grant. “Unfortunately, the consumer usually doesn’t learn that until after sending the money.”  Federal law requires financial institutions to give consumers access to the money from checks or money orders they deposit quickly, usually within 1-5 business days, but just because funds are available doesn’t mean the check or money order is good. It may take weeks for the counterfeit to be discovered. When it is, the consumer is on the hook to repay the bank, credit union, or check cashing service.

 

Compounding the problem is consumer misunderstanding. Fifty-nine percent of the respondents in CFA’s survey incorrectly believe that when you deposit a check or money order, your bank confirms that it is good before allowing you to withdraw the money. The number goes up to 70 percent among young adults age 18-24, and 71 percent of people with incomes under $25,000 and who did not complete high school. More than 40 percent of those surveyed do not know that they are liable if the checks or money orders they deposit or cash are counterfeit. Fifty-two percent age 18-24 and half of Hispanics incorrectly said the person who gave you the check must pay the bank back.

 

Another factor is the fact that the scammers are hard to pursue. They often operate from Canada and other foreign countries, making it more difficult for U.S. law enforcement agencies to bring legal action against them, and they cover their tracks by picking up the money in cash and using phony identification.

 

Created in May 2008, CFA’s Fake Check Task Force brings nonprofit consumer organizations, law enforcement and consumer protection agencies, financial service companies, and other businesses and trade associations together to fight these scams through greater education and awareness. The campaign has several elements, including new information in English and Spanish about grant and mystery shopping scams on the National Consumers League’s www.fakechecks.org Web site and an ecard on the site that consumers can send to warn others about fake check scams. At www.consumerfed.org/fakecheckscams there are several new CFA resources for consumer education including a fact sheet and ready-to-use news articles in English and Spanish, and links to other materials.

 

The CFA Fake Check Task Force has also developed training materials about fake check scams for financial service companies and law enforcement and consumer protection agencies.  They explain how these scams work, suggest strategies for preventing victimization, offer advice about how to help victims, and provide resources for investigations and public education. These materials are not intended for the general public.

Consumer Tips to “Tear Up” Fake Check Scams

 

·  Never agree to pay to claim a prize. No legitimate sweepstakes or lottery would ever send you a check or money order and ask you to send payment in return. If you really won, you would pay taxes directly to the government.

 

·  Never agree to pay for grants from the government or foundations. They don’t offer money to people unexpectedly or charge to get it. Most grants go to organizations, not individuals, and require a lengthy and extensive application process. See new tips on grant scams at http://www.fakechecks.org/prevention-faqs04.html

 

·  Never agree to cash checks and send the money somewhere as part of a job working from home. That is not how legitimate employers operate. See new tips on mystery shopping scams at http://www.fakechecks.org/prevention-faqs05.html

 

·  Never agree to wire money to anyone you have not met in person and known for a long time.

 

·  If it seems suspicious, get advice. Consult your state or local consumer protection agency, the Federal Trade Commission, the Postal Inspection Service, or another trusted source.

 

·  Remember that there is no legitimate reason why anyone who wants to give you a check or money order for something would ever ask you to send money anywhere in return. Go to www.fakechecks.org to learn more about how to protect yourself from fake check scams.

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These are all ways that you can help to fight scams and to spread the word about scam awareness.

Forget the “red flags” – the ONE thing you need to know

There are so many websites and sources that will list the warning signs and red flags to look out for so that you do not fall victim to a scam.  These lists of things to look for are wonderful resources, but I have found over the years that some potential scam victims will read those lists and if one of them does not fit their situation then they think “Well, maybe it is not a scam.”

Some sites, including ours at ScamVictimsUnited.com, will have message boards or other places where people can post the name of their scammer, their email address or even a picture that the scammer is using.  While these are helpful because some of this information will come up in a Google search that a potential scam victim will run, but there are other potential scam victims who will say “I did not find the name/email address/picture of the person I am talking to on a scam awareness site, so this all must be real.”

If you forget all of the “red flags” that everyone has been taught over the years and remember just this one thing it will save you from a majority of the scams that we deal with through our site . . . if someone sends you in the mail/via over night carrier service, a cashier’s check or money order and then asks you to wire any portion of that money to anyone IT IS A SCAM.

Internet Crime On The Rise

The Internet Crime Complaint Center (IC3) released it’s 2008 Internet Crime Report today.  You can view report in full by going to http://www.fbi.gov/page2/march09/internet_033009.html

There was a 33% increase in complaints in 2008 over 2007, with an increase of $25 million lost.  Just think, if more could have been done to educate people about scams and warn them before they became victims, that is money that those people would still have in their pockets.

With the economy in the state that it is, we need to do EVERYTHING we can to protect the money that we have.  One way to do that would be to increase scam awareness with signs in the post offices, banks, Western Union and MoneyGram locations.  PSA would also do a lot to get the word out to the masses.

Would warning signs help?

I have been wondering for a while if warning signs would help to stop people from becoming victims of these scams.  Or would a warning sign be too little too late?

I know that back when we fell victim to the counterfeit cashier’s check scam, if I would have seen a sign at the bank that said “Money from cashier’s checks are made available for use in 24 hours, but the customer is still liable for the money until the time that the check is honored from the issuing bank.  This process could take 10 business days or more.”  I would have stopped right there and we would have NOT taken any money out of our account for well over 10 days.  My husband and I actually agreed that what ever time period the bank told us to wait, we would double it. 

Or at the store where we wired the money . . . if there was a sign that said “Be aware of scams involving counterfeit cashier’s checks being sent for payment on items bought online.  The checks will be for more than the selling amount and you will be asked to wire the difference to someone.”  We would have never wired the money.

Now, some say that by the time a person gets a check in their hands or is at the money wiring store it is too late . . . they already think this is for real and there is nothing that will change their mind.  I would say that this might be true for some people.  I have talked to some of these types of people.  They are holding on to the hope that no matter how crazy this all sounds that it is true.  I compare them to the gambler who is down to his last dollar, but will sit there and continue to play because they are sure that there is a chance they could win.  For these people, yes, nothing will change their minds. 

But I think that there are a LOT more people who would think twice if they saw such a warning.  This information might be out there right now, but most of it is on the internet and the company websites, but the problem with that is that the average person is not going to go to the bank website and read their fraud and scam warnings if they do not think they are getting sucked into a scam.  Once they know it is a scam, that is when the go to the website and they see the warnings . . . but this is too late.  These warnings need to be where they will do the most good . . . at the point of sale/point of transaction at the banks and money wiring locations.  For a few dollars, the cost to print up a post these signs, MILLIONS of dollars could be saved every year.

And, instead of these millions going into the hands of scammers overseas, this money would stay here in the USA . . . wouldn’t THAT help our economy?