Moneygram agrees to pay for consumer education

Journal Record, The (Oklahoma City), Jul 7, 2008 by Marie Price

Oklahoma and 43 other states have reached an agreement with Moneygram requiring the company to establish a $1.1 million consumer- education fund to be overseen by the AARP Foundation.

Oklahoma Attorney General Drew Edmondson said the program is aimed at protecting wire-transfer consumers from fraud and scams.

"Many scams have a wire-transfer component because it's fast, simple, and agents are easy to find," he said. "We see countless frauds, especially lottery scams, that require the 'winner' to pay a tax on the jackpot before receiving their winnings."

He said wire transfers are often suggested as an easy way to pay the bogus tax.

Moneygram is making the changes as part of an agreement of voluntary compliance with the 44 states and the District of Columbia.

Under the agreement, Moneygram will place prominent fraud warnings on its forms, enhance anti-fraud training programs for company agents and provide special training to agents that have experienced elevated fraud levels at their locations.

Moneygram agreed to suspend or terminate locations that are involved in fraud or do not take steps to reduce it.

Other elements of the program will allow consumers to cancel pending wire transfers from any Moneygram location or call 1-800- MONEYGRAM if they think they are a fraud victim. Individuals who generate transfers on the company's Web site may call 1-800-922- 7146 to cancel.

Moneygram has also agreed to refund service fees from such transactions.

The company will also pay $150,000 to the Attorneys General Executive Committee to cover costs. The committee includes nine states (not Oklahoma).

Moneygram Executive Vice President and CEO Tom Ryan said the company was pleased to help launch the program.

"We are committed to helping to stop fraud and protect consumers, and we know that this is an issue that none of us can tackle alone," Ryan said.

The AARP program is expected to get under way in the next three- to-six months.

"Preventing consumer fraud and abuse are critical components of financial security," said Robin Talbert, president of the AARP Foundation.

In 2005, Oklahoma and other states came to a similar agreement with Western Union.

"We hope these steps will reduce the number of consumers who are duped by conmen into wiring money," Edmondson said. "When it comes to scams, education is the key to prevention."