Hawai’i Participates in Multi-State MoneyGram Settlement

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Stephen Levins. Department of Commerce and Consumer Affairs file photo.

Stephen Levins. Department of Commerce and Consumer Affairs file photo.

Hawai’i is among a number of states in the country taking part in legal action against Dallas-based company MoneyGram Payment Systems, Inc.

On Thursday morning, Executive Director of the State of Hawai’i Office of Consumer Protection Stephen Levins announced that a settlement had been achieved.

The settlement stems from a multi-state investigation, in which there were complaints from consumers who used MoneyGram’s wire transfer service to send money to third parties involved in schemes to defraud consumers.

Forty-eight states and the District of Columbia participated in the settlement, along with Hawai’i.


“We believe that this settlement will help to protect vulnerable consumers from wire fraud”, said Levins. “Crooks routinely use wire transfers to con unwary consumers out of their money. Anytime someone insists that a money wire is the only method to transfer funds to them red flags should go up, especially if it involves a lottery or sweepstakes. No one should ever wire money to claim a prize. If you do, you’ve been scammed and you’ll never see your money again.”

There were two main components of the settlement. MoneyGram agreed to maintain and continue to improve a comprehensive and robust anti-fraud program designed to help detect fraud and prevent consumers from suffering financial losses as a result of these types of fraud induced wire transfers.

The program must be documented in writing and at a minimum, must include the following elements:

Mandatory and documented compliance training for agents and guidelines regarding when an agent’s conduct warrants suspension or termination;


Suspension or termination of agents who fail to take commercially reasonable steps to reduce fraud induced money transfers;

A hotline system – telephonic and electronic- where employees and agents can report noncompliance with anti-fraud measures;

Sound mechanisms to evaluate actual fraud rates and consumer losses from fraud induced money transfers in order to utilize that information to improve compliance; and

Continued enhancement of technology solutions, including its Anti-Fraud Alert System (AFAS).


The second component involved MoneyGram paying $13 million to the states involved in the settlement to fund a nationwide consumer restitution program and for states’ costs and fees.

Hawai’i will receive $85,000.

An independent third party settlement administrator will review MoneyGram records and send notices regarding restitution to all consumers who are eligible to receive restitution under the settlement.

Consumers who are eligible for restitution previously filed complaints between July 1, 2008 and Aug. 31, 2009. The complaints were regarding fraud-induced transfers sent from the U.S. to foreign countries other than Canada.

To review addition information about the settlement, visit the Settlement Administrator’s website.

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