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Moneygram To Pay $115 Million Compensation To Scam Victims

Federal Trade Commission (FTC) has ordered MoneyGram to pay $115 million in compensation to its fraud victims. The recent move came as a result of a 4-year old action by the US regulators against the global money transfer service. As per the charges, MoneyGram failed to crack down on scammers that used its platform for wrongdoings.

Moneygram also settled with FTC in 2009. The company also signed an agreement with U.S Department of Justice in 2012 in which it assured of strict action against the fraudsters. However, as per the recent charges, the company failed to comply with these commitments. Consequently, around 40,000 users got scammed by the fraudsters and lost $115 million.

Moneygram Turned A Blind Eye Towards Scammers

According to FTC, the company didn’t take any actions to prevent the illicit use of its services. In fact, MoneyGram customer service turned a blind eye to such malpractices. The company had previously agreed with the US regulators to implement a fraud prevention mechanism. However, such an initiative never saw the light of day and the fraudulent activities increased.

MoneyGram violated an FTC order by continuing to let scammers rip off its customers.

Samuel Levine – Director FTC

Federal Trade Commission worked closely with its law-enforcing partners during this action. FTC also collabprated with US Department of Justice Criminal Division. According to the assiatant attorney Kenneth A. Polite, the recent action proves DOJ’s commitment to making victims whole. The regulator also warned other firms that facilitate fraud to face similar consequences.

In 2021, Federal Trade Commission (FTC) opened a claim process for the scam victims. The people who submitted their claims during this period would be fully compensated for their losses. FTC has collaborated with US Postal Inpection Service to reimburse the funds to around 40,000 MoneyGram victims.

Christopher A. Nielson would be the inspector in charge at the USPIS philadelphia department. He also expressed his pleasure in the latest colloboration with FTC for the disbursment of funds to scammed clients.