Scammers like getting paid quickly and anonymously. That’s why wire transfers are one of their preferred payment methods.

“They can get your money quickly anywhere in the world, and they can largely remain anonymous while doing so,” said Todd Kossow, a fraud fighter at the Federal Trade Commission office in Chicago.

The FTC is trying to return $125 million to victims who wired money to con artists between 2013 and 2017 using MoneyGram. That money is part of a 2018 settlement with the FTC and Department of Justice.

About 300,000 people who complained about MoneyGram already received claim forms to get their refund.

Anyone who believes they qualify for a refund and did not receive a claim form can request one online. The deadline is August 31st.

MoneyGram and Western Union know fraudsters use their services to steal money from their victims. In fact, the FTC sued both companies about that issue: MoneyGram in 2009 and Western Union in 2017. In their settlements with the government, both companies agreed to protect people from fraud.

But MoneyGram didn’t comply with the settlement, the FTC and DOJ alleged, so they went back to court and in 2018 won a new settlement, with MoneyGram agreeing to refund $125 million.

When that second settlement was announced, FTC staff attorney Karen Dodge wrote in a blog post:

Here’s the story: in 2009, MoneyGram had promised to vet the agents they were hiring, train them to spot fraud, monitor them to watch for fraud-related money transfers, take action if they saw an agent who didn’t try to reduce fraud, and also record fraud complaints and share them with the FTC.

But the FTC’s investigation showed that MoneyGram hadn’t adequately done those thingsespecially in their large chain outlets. And MoneyGram’s system that should have helped spot and stop fraudsters operating in plain sight? It basically didn’t work for a year and a half, letting millions of dollars in fraud-related transfers go through.

Are You Eligible to File a Claim?

To qualify, you must have sent a MoneyGram transfer to a fraudster from the United States between January 1, 2013 and December 31, 2017. You must have used your name on the money transfer.

You don’t have to pay any fees and you don’t need a lawyer to file a claim. You are required to provide your Social Security Number on the claim form because the U.S. Treasury Department needs to find out if you owe the government any money before you can get paid—and it needs your SSN to do that.

Gilardi & Co. LLC is handling the refund claims. Use its MoneyGram Remission website to file a claim.

More Info: FTC webpage on MoneyGram Refunds

The Bottom Line

Despite increased vigilance by the big money transfer services, con artists will still try to use them. So, you need to be on guard.

Follow this simple rule: Never wire money to somebody you don’t know, somebody who you’ve only talked to over the telephone or met online—especially if they’re threatening you. If they’re asking for money and want you to pay via money transfer, it’s a scam.

The same goes for gift cards, another payment method popular with crooks. Remember: No government agency, no law enforcement department, and no utility will ever call and ask you to buy gift cards to pay a bill or a fine. No matter what the caller tells you, if they want you to buy gifts cards and give them the numbers off the back of the cards—hang up.

More Info: The FTC also has detailed information about gift card scams on its website.

 




Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for KOMO radio in Seattle. You can also find him on Facebook, Twitter, and at ConsumerMan.com.