When do you think consumer fraud starts to be the victim’s fault?
Matthew Hathaway, one of my colleagues, wrote a story today about MoneyGram International, the second largest money-transfer company — after Western Union. The company settled a consumer fraud claim with the Federal Trade Commission for $18 million.
There are plenty of places to talk about that specific case. Matt has written about it on his Savvy Consumer blog. The later story about the case is posted here and there are readers commenting on the case there as well.
One of the comments bugged me a little. A reader wrote: “I’m stupid and I do stupid things with my money so the company that handles the transaction has to pay. This is a great country.”
The implication, of course, is that the victim was at fault for allowing herself to be scammed. If you read the story, you can certainly see how the 82-year-old woman we featured might have suspected something sooner, before she wired $5,000 to someone she thought was her grandson. But she’s not the only one who was scammed. The story notes that 41,000 others in a four-year period complained about scams by the company.
They were all stupid?
Yes, we know the old sayings. We repeat them frequently. “If it seems too good to be true, it probably is.” Or the other old saw, “Let the buyer beware.”
When you look at cases like this, can you ever imagine yourself a victim of consumer fraud? Or do you insist that you’re too smart to let it happen to you? Is this sort of thing ever really the victim’s fault? Partially the victim’s fault? Never the victim’s fault?
Does any of this mean fraudsters shouldn’t be prosecuted for scamming consumers?
Kurt is the director of social media for the Post-Dispatch, where he has worked since August 2002. He's been a journalist since 1982, covering municipal government, courts, education and two hurricanes as a reporter before becoming an editor. 
I can see how the lady was scammed. However, the article says she began to suspect it wasn’t her grandson after the second request but it doesn’t say if she sent the additional money. Did she or didn’t she? If she did, it’s on her.
She didn’t send money a second time. We should have made that clear. I’ll add it to the online version of the story.
The Moneygram employees who were complicit should be prosecuted. But unless corporate management was aware that these employees were complicit, and did nothing about it, the company should not be liable.
You say that “41,000 others in a four-year period complained about scams by the company.” But these scams were not BY THE COMPANY, it was merely a conduit. We don’t punish an internet provider because one of its customers views illegal pornography. We don’t punish AT&T because one of its customers uses the phone to threaten somebody. How is this any different?
Just to repeat what was in the story — and clarify why MoneyGram was fined:
The FTC representative said the company turned a blind eye to the scammers using its service. The FTC said that from 2004 to 2008, MoneyGram received more than 41,000 fraud complaints from U.S. consumers. The company’s own fraud department warned that something was amiss, as did law-enforcement agencies. (emphasis added)
Don’t blame anybody.
Determine where the integrity is out, and clean it up. If cleaning up means returning money. Do it. If it means accepting the cost, including the time to pursue restoring integrity, as a lesson learned . Do it.
See. No blame.
I’ve also heard of stories of people wiring money because friends or relatives asked for it via facebook. i.e. their facebook account was hacked and someone they knew requested money. In THIS scenario, I think it’s 100 percent the victim’s responsibility to communicate with the person requesting the money. Sending money to someone you haven’t even spoken to is stupidity at it’s finest.
I can see how this old lady was scammed. She thought it was her grandson in trouble. That’s unfortunate, and I hardly would fault her when she thought she spoke with her grandson. I can see how the companies transferring money out of country should bear some responsibility. They know of these scams and do nothing to prevent them, and THAT is why they should be held partly responsible.
Any time someone is wiring money out of country, these companies should be required to advise the person about these scams and advise the person sending money to be 100 percent certain the person they are sending it to is the person who is going to receive it. And I don’t mean a disclaimer in fine print on the bottom of a form, I mean TELL the person or read the disclaimer to them. This would protect MANY fraud victims, and also protect the company from liability.
Throughout the history of man, “stupid” people have always been scammed. Just look at religion. Caveat emptor folks.
The slap at religion was unfounded and sounds trite, makes the poster look petty.
Anyway, no doubt there’s a cavaet emptor in play here. But as noted, the company ignored many complaints so there has to be some liability there. 80% consumer fault, 20% company in this case. I mean really, don’t you think you should be a bit more diligent as to where you send your money? Aside from the taxes I pay, I know where my money is going.
No one is responsible for their own actions in this country anymore. The blame is always transferred to business or government who hand out compensation and pass it along to consumers and taxpayers. The whole system has become a joke!
In this case, I think Money Gram was wrong. Even in the days of the Knights Templer, if I send money to Kurt Greenbaum, the Templers would make sure only Mr. Greenbaum would be allowed to make a withdrawal.
It would be almost effortless to verify someone’s identity before allowing them to pick up cash being sent - but Money Gram was clearly more concerned with their transaction fee than stopping fraud. They allowed these crimes to go on because they got a cut of the action.