MoneyGram has already agreed to pay millions of dollars to settle allegations that criminals were using its service to defraud people. With that, Attorney General Mark R. Herring and other state attorneys general announced the settlement with MoneyGram Payment Systems Inc.
According to NBC29, since Attorney General Mark R. Herring wanted to protect Virginians, he has recently announced a settlement with Dallas-based MoneyGram Payment Systems, Inc. resolving a multistate investigation. This is allegedly focused on complaints from consumers who used MoneyGram's wire transfer service to send money to third parties involved in scams and schemes to defraud consumers.
In addition to the Commonwealth of Virginia, 48 states and the District of Columbia participated in this settlement. This aims to strengthen safeguards that prevent scammers from ripping off consumers through money transfers.
"Scammers and con artists use a whole range of increasingly-sophisticated schemes to persuade consumers to wire them money," stated Attorney General Herring. He also added, "these can range from the 'grandparent or relative in distress' scam, in which a fraudster contacts a grandparent and falsely claims that money must be wired to assist with a grandchild's medical or legal emergency, to lottery and contest scams in which consumers are told they have won a large sum of money but must first wire money to pay required taxes or fees before receiving their winnings. "
The settlement between MoneyGram and the states has two main components. Firstly, MoneyGram has decided to uphold and go on with the improvement of a comprehensive and robust anti-fraud program. This will be designed to help detect and prevent consumers from suffering financial losses as a result of these types of fraud induced wire transfers, as reported by Augusta Free Press.
Next is that MoneyGram has agreed to pay a total of $13 million dollars to the states to fund a nationwide consumer restitution program and for the states' costs and fees. The settlement provides for an independent third party settlement administrator who will review MoneyGram records and send notices regarding restitution to all consumers who are eligible to receive restitution under this settlement.
Richmond also claimed that in addition to Virginia, 48 states and the District of Columbia participated in the settlement. A spokesman for Herring mentioned that the state will get $20,000 from the settlement and will work with a third-party administrator to identify and contact people who may be eligible.
For now, generally speaking, people who are eligible for restitution are those who filed complaints with MoneyGram between July 1, 2008, and Aug. 31, 2009. But it is still unclear how many Virginia residents might be eligible for restitution.
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