MoneyGram
MoneyGram International, Inc. (NYSE: MGI) is a United States-based financial services company, headquartered in Minneapolis, Minnesota. It has additional facilities in Brooklyn Center, Minnesota, Lakewood, Colorado, and international offices in a number of countries.
MoneyGram International offers products and services through a network of agents and financial institution customers. The Travelers Express Company, Inc., which has been in operation since 1940, acquired MoneyGram Payment Systems, Inc. in June 1998. The business was incorporated in December 2003 in connection with the 2004 spin-off from its parent company, Viad Corporation, and is now known as MoneyGram International.
MoneyGram International provides money transfer services, money orders, and bill payment services to consumers. Another segment of MoneyGram International provides financial institutions with payment processing services, primarily of official check outsourcing services and money orders for sale to their customers.
The major corporate competitor of MoneyGram is First Data Corporation's Western Union, which is considerably larger than MoneyGram.
Use of MoneyGram services in Internet scams
Just like its major competitor Western Union, MoneyGram is being used by scammers mostly from foreign countries to steal money. Nigerian fraudsters are notorious for advance fee fraud (419) and romance scams for which they rely entirely on telegraphic money transfer services. Just like Western Union, Moneygram will always advice its customers to never send money to someone they have never met in person, especially if the person is in Nigeria.
Other commonly used fraud schemes involve perpetrators choosing their targets mostly through online auction sites such as eBay but also simple community based ones, and offer to buy expensive merchandise with a MoneyGram transaction. When they then pay their victim with a stolen credit card or other fraudulent means of payment, MoneyGram first shows the transaction as having happened, which lulls the victim in safety and makes him send the seemingly paid for items.
A few days or weeks later when the sending bank discovers the fraudulent nature of the payment, the transaction will get reversed and the seller loses the transferred money with no means of recourse or a way of getting his merchandise back.
MoneyGram has since released a statement that buyers who offer to pay with their services to unknown sellers should not be trusted [1]
External links
MoneyGram offers different types of money services. In the case of a fraud situation it was stated eariler that there are initial funds that look to be in the hands of moneygram and so they put the minds of the sellers at ease. This is not the case, for this is not how the company functions. There are two main types of services, there are moneygram wire transfers, and moneygram money orders. In the case of a wire transfer CASH and only CASH is accepted as payment from the MoneyGram agent. Once the agent has collected money from an individual that money is available world wide, there is no waiting period (as many scam situations often say). If money is shown as available in a wire transfer it will be paid out. The collecting agent is held responsible for verifying the validity of the money, which is why CASH is the only payment accepted. There cannot be a situation where money appeared for an individual and then disappears later.
A money Order however is a different situation and checks and money orders are more easily copied. It is possible for a fraudulent check to be sent as payment and for that check to be initially received by a bank. This has nothing to do with MoneyGram, but often for appearances their name or the names of other reputable companies might be used. Of course at a latter time the bank realizes the mistake and demands their money back.