The funds come from a $125 million administrative forfeiture from MoneyGram as part of an agreement with the U.S. Department of Justice and the Federal Trade Commission filed in 2018. That agreement came after a similar agreement in 2012, when MoneyGram agreed to implement a new fraud interdiction system. However, that system ultimately proved ineffective, and MoneyGram failed to block a substantial number of transactions associated with entities they previously identified as receiving fraudulent transactions.
MoneyGram did not disclose the system’s weaknesses to the U.S. DOJ and instead portrayed the increase in fraudulent transactions as being related to external circumstances. An investigation by the U.S. Postal Inspection Service found that scam artists posing as family members in need, law enforcement officials, the IRS, and conducting other schemes, directed consumers to send money through MoneyGram during this time. MoneyGram admitted that it processed at least $125 million in additional fraudulent transactions.
Individuals who believe they sent money to a scammer through MoneyGram between January 1, 2013, and December 31, 2017, may file a petition online at the remission website www.moneygramremission.com through August 31. More information regarding the remission process, including eligibility criteria, updates, and frequently asked questions is available at the remission website or by calling 1-844-269-2630. The remission administrator will not ask for any payment in order to participate in this remission process. The U.S. Postal Inspection Service is leading the remission effort.
The process is similar to effort used by the Office of Attorney General to help Kansans recover $3.9 million from fraudulent transactions made through Western Union services. In November 2017, Schmidt announced a landmark legal settlement with Western Union that required the company to provide refunds to Kansans who could prove they lost money to a scam and used Western Union wire services to send money to the scammers. The settlement, which was reached by Kansas alongside other states and the federal government, resolved allegations that the company had willfully turned a blind eye to the use of its services to defraud people.