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February 11, 2016
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
Page 1 of 2


(MONTGOMERY)–Attorney General Luther Strange today announced a
settlement with Dallas-based MoneyGram Payment Systems, Inc. The settlement
resolves a multistate investigation which focused on complaints of consumers who used
MoneyGram’s wire transfer service to send money to third parties involved in schemes
to defraud consumers. In addition to Alabama, 48 states and the District of Columbia
participated in this settlement.
“Fraudulent wire transfer schemes are prevalent and almost endless in the
variety of scams perpetrated on unsuspecting victims,” said Attorney General Strange.
“Con artists prey on a grandparent’s love and trust by claiming to be a grandchild in an
urgent crisis. Others use the lure of riches through lottery and contest scams, or claim
to be relatives facing emergency in a foreign land. The key to fight these tricks is
vigilance on the part of consumers. If a stranger solicits someone offering big winnings
for a wire transfer, the recipient should end the communication immediately. People
who are contacted about a family member or friend in distress should not panic, but
reach out independently to verify that assistance is actually needed.”
The MoneyGram settlement has two main components. First, MoneyGram has
agreed to maintain and continue to improve a comprehensive and robust anti-fraud
program designed to help detect and prevent consumers from suffering financial losses
as a result of these types of fraud-induced wire transfers. The program must be
documented in writing and at a minimum, must include the following elements:

  • mandatory and documented compliance training for agents and guidelines
    regarding when an agent’s conduct warrants suspension or termination;
  • suspension or termination of agents who fail to take commercially reasonable
    steps to reduce fraud-induced money transfers;
  • a hotline system – telephonic and electronic- where employees and agents can
    report noncompliance with anti-fraud measures;
  • sound mechanisms to evaluate actual fraud rates and consumer losses from
    fraud induced money transfers in order to utilize that information to improve
    compliance; and
  • continued enhancement of technology solutions, including its Anti-Fraud Alert
    System (AFAS).
    501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
    www.ago.state.al.us Page 2 of 2

Second, 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. Generally, consumers who
are eligible for restitution previously filed complaints with MoneyGram between July 1,
2008, and August 31, 2009, regarding fraud-induced transfers sent from the U.S. to
foreign countries other than Canada.
More information about this settlement is available at the Settlement
Administrator’s website: www.MoneyGramSettlement.com
In addition to Alabama, the following participated in the settlement: Alaska,
Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New
Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota,
Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin,
Wyoming, and the District of Columbia.