MoneyGram International, Inc. has agreed to pay $125 million to settle allegations that the company failed to take steps required under a 2009 Federal Trade Commission order to crack down on fraudulent money transfers that cost U.S. consumers millions of dollars.

The $125 million payment is part of a global settlement that resolves allegations that MoneyGram also violated a separate 2012 deferred prosecution agreement with the Department of Justice.

MoneyGram, Western Union, and USPS prevent fake money orders by including a watermark; If you are still suspicious, it’s a fake money order and receipt, then insist on getting paid in cash. Can you use a credit card for a money order? Only a couple of places let you buy a money order with a credit card. How To Avoid a Fake Check Scam. Never use money from a check to send gift cards, money orders, or wire money to strangers or someone you just met. Many scammers demand that you send money through money transfer services like Western Union or MoneyGram,. Cashier’s Check vs. Money Order What is a Money Order. A money order is the form of payment for a particular amount. The two persons use it as a payment form. You can use it in exchange for a service or product. People need to pay the amount to get the money order. You produce the official money order document to the other person.

“The FTC’s 2009 order required MoneyGram to protect consumers from fraud through its money transfer system, and today we are holding MoneyGram accountable for its failure to do so,” said FTC Chairman Joe Simons. “MoneyGram’s alleged failure to implement key provisions of the order allowed scammers to continue to use its money transfer system to rip off consumers.”

Money transfers are a preferred method of payment for fraudsters because money sent through money transfer systems can be picked up quickly at locations all over the world, and once the money is paid out, it is all but impossible for consumers to get their money back. The systems also often allow scam artists to remain anonymous when receiving money from their victims.

In its new filing addressing violations of the 2009 order, the FTC alleges that MoneyGram failed to implement the comprehensive fraud prevention program mandated by the 2009 order, which requires the company to promptly investigate, restrict, suspend, and terminate high-fraud agents.

The 2009 order required MoneyGram to conduct timely fraud investigations of any agent location that has received two or more fraud complaints within 30 days; has fraud complaints totaling 5 percent or more of the location’s total monthly received transactions; or has displayed any unusual or suspicious money transfer activity. It also must terminate locations that may be complicit in fraud-induced money transfers.

The FTC alleges that MoneyGram was aware for years of the high levels of fraud and suspicious activities involving certain agents, including large chain agents. For example, the standards MoneyGram established for taking disciplinary actions did not comply with the 2009 order, because those standards required agents to have unreasonably high fraud rates before they could be suspended or terminated, according to the FTC. At the same time, MoneyGram also often failed to promptly conduct the required reviews or to suspend or terminate agents, particularly those from larger locations with high levels of fraud.

The FTC alleges, for example, that MoneyGram did not place any restrictions on one large chain agent until approximately mid-2013, even though the chain was the subject of more fraud complaints than any other MoneyGram agent worldwide. Some of the chain’s locations had fraud rates as high as 50 percent of the money transfer activity. When it did take disciplinary action, MoneyGram focused on lower-volume, “mom and pop” agents with high levels of fraud, while treating large chain agents differently, according to the FTC.

An overly-committed buyer orders twenty or your most expensive items. He sends you a Moneygram Money order worth around $1000. You cash out the check and think you completed the order. Mind that the scammer may have forged or altered the check. You could buy a $10 money order and make it look like a $1000 order.

The FTC also alleges that MoneyGram’s computerized monitoring system, aimed at blocking known fraudsters from using its service, malfunctioned for an 18-month period in 2015 and 2016. During that time, MoneyGram failed to block individuals that the company knew or should have known were using its service for fraud or to obtain fraud-induced money transfers.

MoneyGram also allegedly violated the order by failing to properly vet its agents and by not providing appropriate training on how to detect and prevent consumer fraud for all its agents, including locations with high fraud rates.

Under the 2009 order, MoneyGram also was required to record the complaints it receives about fraud-induced money transfers and to share that information with the Commission. Between January 1, 2013 and April 30, 2018, MoneyGram received at least 295,775 complaints about fraud-induced money transfers—a large majority of which involved a small percentage of agents. The Commission alleges, however, that the company, in some cases, failed to record information it received about fraud-induced money transfers and share it with the FTC.

In addition to the monetary payment, MoneyGram has agreed to an expanded and modified order that will supersede the 2009 order and apply to money transfers worldwide. The modified order requires, among other things, that the company block the money transfers of known fraudsters and provide refunds to fraud victims in circumstances where its agents fail to comply with applicable policies and procedures. In addition, the modified order includes enhanced due diligence, investigative, and disciplinary requirements.

The Commission wishes to thank the following agencies for their assistance in this matter: The Department of Justice’s Money Laundering and Asset Recovery Section; the U.S. Attorney’s Office for the Middle District of Pennsylvania; the U.S. Postal Inspection Service, Philadelphia Division Office in Harrisburg, Pennsylvania; and the Office of the Minnesota Attorney General.

The Commission vote authorizing the staff to file the stipulated order for compensatory relief and modified order for permanent injunction was 5-0. The FTC filed the stipulated order in the U.S. District Court for the Northern District of Illinois, Eastern Division. NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

In a fake check scam, a person you don’t know asks you to deposit a check— sometimes for several thousand dollars, and usually for more than you are owed — and send some of the money to another person. The scammers always have a good story to explain why you can’t keep all the money. They might say they need you to cover taxes or fees, you’ll need to buy supplies, or something else.

Fake checks come in many forms. They might look like business or personal checks, cashier’s checks, money orders, or a check delivered electronically. Here’s what you need to know about fake check scams.

Types of Fake Checks Scams

Fake checks are used in many types of scams. Here are some examples:

Mystery shopping. Scammers pretend to hire people as mystery shoppers and tell them their first assignment is to evaluate a retailer that sells gift cards, money orders, or a money transfer service, like Western Union or MoneyGram. The shopper gets a check with instructions to deposit it in a personal bank account and wire it to someone else. But once the money is wired, the person on the other end can disappear.

Personal assistants. People apply online and get hired as personal assistants. They get a check and are told to use the money to buy gift cards or to buy equipment or supplies for their new client. Once the scammers get the gift card PIN numbers, they use them instantly, leaving the “personal assistant” without the money when the bank figures out the check is bad.

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Moneygram Money Orders Fake Vs Real