How To Avoid The Moneygram Scam

Do you want to know how to avoid the MoneyGram scam? The scam affected millions of U.S. and Canadian MoneyGram customers needed between 2004 and 2008, to avoid being scammed out of more than $80 million.    

On October 19, 2009, the Federal Trade Commission filed a lawsuit against MoneyGram International (MGI) and won an $18 million settlement for U.S.consumers scammed using MoneyGram money wire transfers.   

The FTC lawsuit cited that MoneyGram’s day to day business operations fostered a conducive atmosphere for fraud to flourish, finding that as many as ten percent of MoneyGram’s Canadian agents were found to be willing participants in fraudulent schemes. The FTC further stated that whistleblowers within MoneyGram were fired or subjected to disciplinary actions.  In one month alone, 80 percent of MoneyGram’s wire transfers of $1,000 or more were fraudulent in nature. This is startling information for this Minnesota based company. 

MoneyGram International, Inc. began as The Travelers Express Co., Inc. in 1940, and in June 1998, gained ownership of MoneyGram Payment Systems, Inc. from American Express, and is headquartered in St. Louis Park, Minnesota with offices in New York City and Coral Gables, Florida.  

The typical MoneyGram customer uses its services to pay bills, purchase money orders and make money wire transfers to relatives in other countries, or for family or friends in emergency situations. The typical MoneyGram customer is the most frequent target of MoneyGram scammers. Knowledge is power, and this article will empower you by helping you recognize and avoid the MoneyGram scam.

  1. Never, never send money to people you don’t know. If money is wired to a stranger it is not recoverable and is not refundable.
  2. Never send money to a family member claiming to be in an emergency situation. This type scam is frequently committed against the elderly, by a caller saying a family member is sick, injured or is being detained by the police. If identity or location of relative cannot be determined, do not wire any money.
  3. Never send MoneyGram if this is the only method of payment. Wired money can be picked up fast and at multiple locations making it difficult to track.
  4. Never send money to collect lottery or sweepstakes winnings.  When email, letter or phone call is received stating you have won the lottery or sweepstakes, but you must wire money to pay taxes or fees before claiming your prize.   Do not send money. You will never be asked to pay taxes or fees before claiming a valid prize.    
  5.  Internet Purchases, Newspaper Ads. Offer to pay by credit card or Pay Pal, but if seller demands a MoneyGram money transfer as payment, this is a scam.  
  6. Romance Scams. If you have met someone in a chat room or personal ad, and they ask you wire money transfer for to cover travel expenses for face to face meeting. This is a scam and the money lost is not recoverable or refunded. 
  7. Check or money orders received. If someone sends you a check or money order asking you to cash the instrument at your bank, and send some of the money by MoneyGram to a third party. This is a scam, and you will liable for any shortfall your bank incurs.
  8. How to apply for part of $18 million settlement. If you are a victim of a MoneyGram wire transfer scam, file a written complaint with MoneyGram.  To initiate your claim call 1-800-666-3947, or file a complaint with the FTC at Web site or by calling 1-877-382-4357, or file a complaint with your state’s Attorney General.  

Bottom line, only use MoneyGram money transfer with people you know very well, and avoid any transaction requiring MoneyGram as the only method of payment.    

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