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Wow, I can't believe the agents were themselves involved in fraudulent activity. I guess MoneyGram's plan to outsource to Nigeria for cheap labor didn't work out that well after all.
Wow, I can't believe the agents were themselves involved in fraudulent activity. I guess MoneyGram's plan to outsource to Nigeria for cheap labor didn't work out that well after all.
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What I find interesting is that when you talk to these defrauded people, they will insist on sending the money. When you point out that there are many instances of Moneygram fraud, they will tell you how they know the recipient personally so it's obviously not a fraud. What I've never figured out is...that person that died in some other country and left you those thousands of dollars, why is it you never heard of him before? And why didn't he leave anything to your siblings or parents?
It's much more difficult to talk people OUT of being defrauded than it was to talk them INTO it in the first place.
Shouldn't this money go to the financial institutions who had to take losses on the items that the consumers disputed? Up until mid 2008, Western Union was \"Verified by Visa\" which protected them from chargebacks for fraud (unless of course the cusotmer's bank was enrolled in the \"Verified by Visa\" origram, which most are not).
-that was program, not origram..
How about Moneygram pay back the 84 million they know people where defrauded.
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@Sudonum: Yes, as a matter of fact my dear grandson (I forget which grandson he said he was) says he was just in an accident in Nigeria and needs emergency cash RIGHT NOW to buy a new passport and plane ticket.
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The Moneygram associates who were involved in fraud aside, why is it Moneygram's responsibility to tell people they are being defrauded? If they aren't actually doing the defrauding, why should they be held responsible? Is Google/Hotmail next, since they facilitate the emails that generally kick-off these scams?
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@Esquire99: Wellll.... \"According to the FTC's complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada\"
... And possibly:
\"The FTC's complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network, claiming that proposals to deal with the problem were too costly and were not the company's responsibility. The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents. Some employees who raised concerns were disciplined or fired, the FTC charged.\"
It's all there in black and white. They knew that employees were conducting in fraudulant activity and did nothing about it. Also, when a vast majority of your business is fraud, then you are directly responsible for it.
Greed and cover ups never work for companies in the long run, and are only done by short sided fools who have no interest in the well being of any of their customers.
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@Esquire99: Because they claim it's safe. I mean, would you also suggest that credit card companies shouldn't inform its customers of fraud, either? After all, they're not actually doing the defrauding, either? At any rate, it's good business sense to preserve your reputation by trying to eliminate fraud.
@Mr_Human:
Credit card fraud is different. In that case, someone is actively stealing your credit card number without your knowledge. In this case, you're voluntarily sending money to someone of your choosing.
Further, I think the term \"safe\" was probably meant \"Give us your money and we'll ensure that it SAFELY gets to the person you want us to send it to,\" not \"we'll make sure the person you're sending this to is not a con artist.\"
@Esquire99: Even by this statement
\"Give us your money and we'll ensure that it SAFELY gets to the person you want us to send it to,\"
You kinda proved the point.
IT IS Moneygrams responsibility to make sure the person on the other end isnt a con-artist. Its not hard to check this fact, but it does mean costing money the company could be making which is why they chose to look the other way.
Realistically Moneygram knows if this went to court they would have to pay back the full amount, because they where knowingly a party to fraud. What I really want to know is why the government was so easy to cave.
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\"If they aren't actually doing the defrauding, why should they be held responsible?\"
I thought about this as well, but let's set aside that for a moment. What they are clearly responsible for is that their employees are not engaged in criminal activity. From the FTC release, it appears that the company did little or nothing to investigate employees that statistically and improbably accounting for nearly all the fraudulent activity.
The FTC's complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network...The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents./i>
As for their responsibility if it wasn't their employees, then that's a good question. That depends on the statutes covering their type of financial transactions.
\"If they aren't actually doing the defrauding, why should they be held responsible?\"
I thought about this as well, but let's set aside that for a moment. What they are clearly responsible for is that their employees are not engaged in criminal activity. From the FTC release, it appears that the company did little or nothing to investigate employees that statistically and improbably accounting for nearly all the fraudulent activity.
The FTC's complaint alleges that MoneyGram ignored warnings from law enforcement officials and even its own employees that widespread fraud was being conducted over its network...The company even discouraged its employees from enforcing its own fraud prevention policies or taking action against suspicious or corrupt agents.
As for their responsibility if it wasn't their employees, then that's a good question. That depends on the statutes covering their type of financial transactions.
\"According to the FTC's complaint, MoneyGram knew, or avoided knowing, that about 131 of its more than 1,200 agents accounted for more than 95 percent of the fraud complaints it received in 2008 regarding money transfers to Canada\"
OMG that is f--ked up!
@twophrasebark:
I wonder what the geographic distribution of those agents are. I suspect they are in areas where the scammers have found to be particularly susceptible to their tricks.
\"I suspect they are in areas where the scammers have found to be particularly susceptible to their tricks.\"
FTA: \"in some cases its agents in Canada actually participated in these schemes\"
You would appear to be correct.
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Why Western Union is an Angel...
During Katrina, my father's workplace, which employed about 6000 people in New Orleans, had their employees blown to the four corners of the Earth.
His company, during a six week shutdown, was able to wire their workers paychecks, (and, thankfully, additional money during the shoutdown) no matter where they were in the U.S.
...and why they should be condemned to hell...
I, unfortunately, have a few 'sucker's bets' credit cards, that won't accept over-the-phone payments by check, but will accept over-the-phone WU payments, which they proudly state a $15 or so fee, which they admit to splitting that fee between WU and Mr. Shady Bank (probably more the Credit Card Co's fault here, but that's about all I got to contribute to the witchhunt)
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My brother once tried to buy final four tix from CL, and the seller told him that Western Union had a service where he could wire the money, but put a \"hold\" on it, and when the tickets arrived, he took the hold off, and the seller got the cash. The clerk at WU told him there was no such service, and he was likely being scammed.
I would expect MoneyGram to at least provide this level of service. They should educate their employees on what to look for and when to warn customers. Maybe they could hang up a few posters explaining common scams (as I'm sure sport/concert tickets are at the top of the list).
Statistically, it looks like agents were involved in scams, but it could just be that they were so incompetent that they let obvious fraud happen under their noses. Either way, MoneyGram should be at least partially responsible.
Why the FTC?
Was the FTC the defrauded ones here?
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It seems like MoneyGram was a conduit used by dishonest people to defraud the gullible. I don't see how MoneyGram is at fault here... if the money were given to the fraudsters by post, would the FTC be insisting the post office be held responsible? MoneyGram's job is to move money from one place to another per their clients' requests. That's it. They should not be second-guessing the client's desire to send money.
They're at fault because they saw that their organization had a serious internal problem and didn't do anything to stop the fraud from happening because they were making money on it.
No, some people just don't have or want their bank accounts connected. My bank account is still connected to my mom's (hmm, maybe I need to think on that) but when I need some money from Dad, he wires it Western Union. My parents have separate bank accounts and sometimes it's easier for daddy's little girl to loosen the grip on his wallet than it is to get some assistance from mom. Especially since he's the one with most of the moola.
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Basically anytime someone is wiring money via Western Union or MoneyGram something shady is going on.
@prag: My brother's in prison. It's the easiest way to get money to his account.
@prag: Not always. When I worked for Sprint, if you didn't want to use credit, MoneyGram was what we reccommended.
Oh, wait. Never mind, you're right.
@prag: People use MoneyGram or Western Union to wire money to family members overseas all the time. It is cheaper than bank wires (for some countries). And there is a lot of places, where banks are simply unreliable or/and corrupt.
(pardon my grammar, it is getting late.)
@prag: There are valid and completely legal reasons for sending funds to distant locations.
Perhaps you're speaking to fees charged?
@prag: I wouldn't say that. My Mom used to wire me $ when I was in college, and my Mom has wired my brother $ via Western Union when he was a few provinces away and his truck broke down.
@prag: Unless you're regularly wiring it to known overseas relatives, in the \"sending money back home\" kind of way. But for a business transaction? Yup.
@prag: You've never had a less fortunate friend or relative need cash in a hurry?
@prag:
Not all the times. I've used Western Union in the past to pay for shared hosting and I know lots of dedicated server companies in US request people outside US or European Union to pay via Western Union because it's safer.
On the other hand, if someone on eBay or some email asks you to pay something via Western Union or Moneygram, I'd say 99% of the time is fraud.