FTC and DOJ Order MoneyGram to Pay $115 Million in Refunds for Fraud Protection Shortcomings

The FTC and DOJ ordered MoneyGram to refund $115 million to nearly 40,000 consumers for its continued failure to protect against fraudulent scammers using their payment system.

After a 2018 investigation into MoneyGram's violation of a 2009 FTC Order, the FTC and DOJ found that MoneyGram had failed to rectify its shortcomings, allowing scammers to collect $115 million from consumers (see previous coverage). Under the terms of its 2009 FTC settlement, MoneyGram had agreed to "put in place a fraud prevention program which, among other things, required the company to promptly investigate, restrict, suspend, and terminate high-fraud agents."

The FTC and DOJ specified that the large refund reflects the awareness MoneyGram had of the continued fraud and for "turning a blind eye" to numerous instances of suspicious payment activity over the years. Refunds are being issued to those consumers who submitted claims on the FTC website in 2021. FTC leadership said that the action reflected the agency's commitment to protecting consumers from firms that allow victimization by scammers.