Consumer complaint received 2016-11-23
Product: Money transfers — International money transfer
Issue: Fraud or scam — 
Company: MONEYGRAM PAYMENT SYSTEMS WORLDWIDE INC (CA)

On XXXX XXXX, 2016, in XXXX XXXX, MoneyGram accepted funds and I was issued a Moneygram wire for {$2400.00} ( I also paid wire fees of {$110.00} ), to be picked up by me when I later was to travel to XXXX in XXXX. 

However, on XXXX XXXX, I checked the online status of my transfer and discovered that Moneygram had already paid out the money within 24 hours to an unknown third party. I demanded my money in a telephone call to Customer Support on XXXX XXXX, but Moneygram refused to pay me the amount or refund it to me. In violation of Regulation E, Moneygram did no investigation within the time frame required, did not provide any documentation regarding the payment to the unknown party and did not advise me of my right to see relevant documents. 

It is suspected that a fake XXXX landlord, who required and to whom I sent proof of available funds ( only a copy of the receipt but not actual payment ), picked up the wire posing as me. I have no knowledge of who Moneygram actually paid, or their true identity. It is also possible that the Moneygram agent colluded with the con artist. 

Moneygram also failed to investigate the circumstances surrounding the payment or maintain and provide records as required by Paragraph XXXX of its internal rules and by XXXX. More specifically, Moneygram has not presented copies of the payment transaction or the " valid ID '' of the alleged payee as required by the applicable laws. 

Moneygram represents its service to be secure and trustworthy according to the Moneygram website and advertisements, using the boldface buzzwords " peace of mind, '' " send securely, '' " easy to receive, '' " reliable, '' which also point out that the recipient will need to show " a valid photo I.D . '' Moneygram 's internal rules and XXXX XXXX XXXX XXXX ( Paragraphs XXXX and XXXX ) go to great length about how Moneygram avoids fraud and requires valid identity confirmation from all recipients. Although Moneygram has numerous rules applicable to its agents regarding proof of identity, there is no evidence that these rules were followed by Moneygram or its local agent. What identification was presented to their agent? Moneygram has not provided that bit of information. 

According to the Federal Reserve, Reg E protects consumers even when they make mistakes -- even mistakes such as writing their PIN number down in a place where a crook can find it. The Federal Reserve 's staff opinion on Reg E states that " Negligence by the consumer can not be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer 's liability for unauthorized transfers. '' So even though I sent a copy of my receipt to the con man, it was still incumbent on Moneygram to follow Reg E, investigate timely, provide records, notify me of my right to see those records, and verify the identity of the person who picked up my money. They failed on all accounts.