I know that a lot of you who read this blog and come to our website do so because you consider yourself the “average consumer” and know you can come to us to get the real information on things, without all of the legal or technical terms that only end up confusing you even more. Recently I told you about Minnesota Bill HF0343, but let's look at it even closer.
Yes, you can do a search for Minnesota Bill HF0343 and find the online information, which allows you to read the bill text as it was introduced. Let me save you the time of searching . . . just click here and here for the State's information on this Bill. Unless you have a background in law, you might read this and say “So what does that really mean, for me?”
In 2007 the MN Department of Alcohol and Gambling started a website called http://www.mnscams.org/ Why is the Department of Alcohol and Gambling even interested in scams and fraud? When Minnesotans were becoming victims of Lottery Scams, they began to reach out to the Minnesota Department of Alcohol and Gambling for assistance. In the video below you can watch an in-depth report on the great lengths that Minnesota law enforcement went to in order to track down these scammers.
This Bill would give the Department of Alcohol and Gambling greater power to subpoena and increase the variety of variations of these scams that the Department would have power to then go after.
This Bill will focus in on money transmitters, like Western Union and Money Gram, would have to have a anti fraud program, including a background check of agents and employees. This will raise the bar for these companies, and force them to look at the way that all of their authorized location are operating, and if one of those location are not upholding the rules and standards set forth, the company can be held accountable. If you have read up on scams and fraud, you have heard the stories of the employees working in a variety of businesses that have “turned a blind eye” to the fact that there are fraudulent transactions filtering through their company only to say “there is nothing we can do about it”. Even worse, there are cases when the employee is actually profiting from the scam.
In 2009 the FTC investigated Money Gram on charges that it allowed their system to be used for fraudulent activity. Money Gram ended up paying $18 million to settle. According to the FTC, Money Gram was aware of the issue and turned a blind eye to the problem. There are many variations of the scams, and while businesses that carry out wire transfers do normally have information about these scams on their websites or on the bottom of their transfer forms, in very small print, these are normally not things that the average customer will see before they become a victim. This Bill will force for more attention to be put on this issue on the defensive side by spotting the warning signs and helping the customer to see them also. Really, it is about good customer service.
The part of this Bill that I am most impressed with is the portion that addresses that the money should go to who you designate on the form, and that they must pick it up where you designate. Now this might sound obvious . . . of course you want the money to go to the person you intended for it to go to, and to where you sent it, but it is not that simple. Right now, if I send money via wire transfer to Joe Schmo in Dallas, Texas and someone else knows the Wire Transfer Number and the Secret Question and Answer, they can pick up that money in any location in the world without having to show valid identification. The Better Business Bureau pointed out this fact in one of their warnings on this type of scam.
How is this possible?!?!?! Well, here is the reasoning behind this “loophole”. What if my friend Joe Schmo had his wallet stolen, so he did not have any valid identification with him that he could show, and he needed that money to pay his bills. Joe would need a way to “prove” that he knew about the wire transfer and that it was intended for him. If I give him the Wire Transfer Number and tell him what the Secret Question and Answer are, he will now have that information, right? Problem solved. Wrong! Now you have just created a NEW problem. What if someone who is not Joe gets a hold of that information? They too can now go and pick up that wire transfer anywhere in the world, and once the money is picked up the transfer cannot be reversed . . . the money is gone.
The scammers understand this, and they use it to their advantage. They can use a pretend name and tell you that they live within the United States. They can tell you that you are sending the money to someone that is their accountant, client or shipping company . . . whatever fits their story that they have used to bait you into this scam. All of the warning signs of a scam alert you to sending money overseas, but you are just sending money to a shipping company in New York, so what do you have to worry about. This Bill would help to close that loophole and require that your money is only being sent to who you designate and that they are where you designate that they are.
It is sad that the scammers know all of this information better than the average American, but this is why these scams work so well. Besides the truth about how the money transfer businesses work, another point that the scammers seem to be better educated on than the average American is how the check clearing process works.
This is why we at Scam Victims United have been working since 2002 to educate people on scams and fraud, and especially the real way that wire transfers and check clearing works. Education is the key to fighting these scams, and you can sign our petition asking for the creation of Scam Education and Awareness Programs.