MoneyGram Reveals Strong Results from New Fraud Prevention Tool

Software system identifies transactions at high risk for being fraudulent;

Since May 2010 MoneyGram has protected customers from losing approximately $22.5 million in fraud

DALLAS--()--MoneyGram International, (NYSE: MGI), a global leader in the money transfer industry, has a new tool in the war against fraud: a tailored software system that monitors send transactions and identifies transfers that could involve fraud, enabling MoneyGram to intervene and prevent its customers from losing money to fraudsters.

Since the tool launched in May 2010 as part of MoneyGram’s efforts to enhance its global consumer anti-fraud program, MoneyGram has prevented thousands of fraudulent transactions, saving its customers about $22.5 million. The anti-fraud tool is a rules-based automated IBM software system that analyzes the transaction data from MoneyGram’s money transfer system. Based on consumer identity management and transaction rules set by the company, the system identifies potentially fraudulent transactions and alerts MoneyGram instantaneously after the transaction has been placed. MoneyGram can then put the transaction on hold, contact the original sender, and if needed, stop the fraudulent transaction from being received.

“We are thrilled with the success of the anti-fraud technology we’ve put in place,” said Phyllis Skene-Stimac, senior vice president and chief compliance officer at MoneyGram International. “We’ve invested nearly $4 million in this state-of-the-art tool as part of our longstanding commitment to continually enhance our consumer anti-fraud program and further protect our customers and prevent fraud. This new technology provides a tremendous benefit over anti-fraud programs that have been in existence for years. Customers trust us with their money and we take seriously our responsibility to help safeguard our customers’ money and thwart malicious attempts made against them or their loved ones.”

Since its launch, the anti-fraud technology has enabled the company to prevent consumer fraud on a large scale:

  • Consumer complaints of fraud in January 2011 compared to January 2010 dropped 72 percent, with the most significant reductions in Canada, Nigeria, the United States, and the United Kingdom.
  • From February 2010 to January 2011, the anti-fraud technology accounted for a 40 percent increase in MoneyGram’s ability to identify and interrupt potentially fraudulent transactions.
  • For the first two months of 2011 alone, MoneyGram identified and interrupted 2,200 transactions suspected of fraud, saving its customers from losing more than $7 million.

MoneyGram invested millions to develop the company specific rules-based tool, a modification of an existing IBM product. The system provides MoneyGram with the ability to keep ahead of fraudsters’ changing scams. When MoneyGram specialists in the fraud operations department spot a new trend, they can immediately adjust the rules to respond to criminal activity. For instance, last year MoneyGram noticed that fraudsters were receiving transactions in California. In early November, MoneyGram analysts added a rule that flagged transactions above a certain dollar amount sent from the United States and Canada to California. That simple change has prevented $1.7 million in suspected fraudulent transactions in just three months. MoneyGram currently has a variety of active rules in place and the company will continue adapting and adding rules as fraud trends evolve.

Further, as part of consumer protection week (March 7-11), MoneyGram offers these tips for consumer wire fraud protection:

1.   Never wire money to someone you don’t know.
2. Never agree to deposit a check from someone who says to send some of the money back.
3. Never wire money to someone who says money transfer is the only acceptable form of payment.
4. Never wire money to a relative in crisis without checking out the story first. Ask the appropriate questions to verify the identity of the person.
5. Know the source of where an unsolicited prize or gift offer comes from and who you’re dealing with. For example, if you receive a message that says: “Congratulations, it's your lucky day! You just won $1,000 in a foreign lottery!” Be wary, especially if you knowingly didn’t enter a sweepstakes or lottery. Further, never pay to collect sweepstakes winnings.
6. Research the legitimacy of an offer; if it sounds too good to be true, it often is.
7. Wiring money is like sending cash – the sender has no protection against loss.

About MoneyGram International

MoneyGram International, a leading global money transfer company, enables consumers who are not fully served by traditional financial institutions to meet their financial needs. MoneyGram offers money transfer services worldwide and bill payment services in the United States through a global network of more than 227,000 agent locations—including retailers, international post offices and financial institutions—in more than 190 countries and territories around the world. To learn more about money transfer or bill payment at an agent location or online, please visit www.moneygram.com or connect with us on Facebook.

Contacts

MoneyGram International
Media Contact:
Lori O’Briant, 214-999-7509
LO’Briant@moneygram.com

Release Summary

As part of its anti-fraud measures,MoneyGram International has prevented thousands of fraudulent transactions, totalling $22.5 million since May 2010.

Contacts

MoneyGram International
Media Contact:
Lori O’Briant, 214-999-7509
LO’Briant@moneygram.com