State AGs Announce $13 Million Nationwide Settlement with Money Services Company

EFTA  •  State AGs

​On February 11, 2016, 49 state attorney generals and the Attorney General for the District of Columbia, collectively the “State AGs,”​ announced​ a $13 million nationwide settlement with a Dallas-based money services company.  The settlement agreement was the result of a multi-state investigation headed by the Consumer Protection Divisions of the respective State AGs.  According to the settlement agreement, the company facilitated the transfer of funds in fraudulent schemes relating to “relative-in-distress” and “lottery and contest” scams.

As part of the agreement, the company has agreed to maintain and continue to improve an anti-fraud program in order to help detect and prevent consumers from incurring losses as a result of fraud-induced wire transfers.  The program includes mandatory document compliance training for company agents, suspension or termination of agents who fail to take reasonable steps to reduce fraud, maintenance of a hotline to report non-compliance with anti-fraud measures, the creation or maintenance of mechanisms to evaluate fraud rates and fraud-induced consumer losses, and the enhancement of the company’s anti-fraud technology solutions.

The company also agreed to pay $13 million to the states to fund a nationwide consumer restitution program.  A portion of the settlement will also cover the State AGs’​ costs and fees.  An independent third party settlement administrator will review the company’s records and send notices regarding restitution to all eligible customers.

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