Consumer Fraud

Overview

Consumer fraud is a potential or actual theft of funds from a customer by means of deceit, trickery and/or manipulation. If you suspect that the customer is a fraud victim or perpetrator, ask them additional questions; refer to Probing Questions below.

Preventing fraudulent transactions from being completed protects customers, agents and MGI.

As an MGI representative, you can and should refuse processing send/receive transactions whenever transaction details match a known consumer fraud scenario; refer to Common Fraud Scenarios below.

If you deny/refund a transaction based on fraud concerns (transaction is potentially fraudulent), educate the sender accordingly and provide them with fraud prevention education; refer to Consumer Fraud Prevention Education below.

Important: remember that MGI employees and agents cannot directly accuse an individual of the fraudulent involvement.

Identifying Potential Fraud

In the process of sending, receiving and/or inquiring on transactions, customers frequently reveal the transaction nature without being directly asked for it; active listening during calls will help you prevent fraud.

Red Flags

MoneyGram has implemented systematic transaction holds that are triggered when transactions are initiated and before they are received, in order to:

Enhance a consumer protection by attempting to verify if senders and receivers who use MGI products/services do not commit fraud, do not perform other foul activities and do not exceed internal/country-specific/regulatory-required thresholds, and adhere to compliance/regulatory requirements.

As a result of the above, you should not suspect fraud on every transaction available for receive and ask probing questions on every call, but only when customer's behavior and/or explanations raise logical concerns.

Only such behavioral red flags, or behavioral red flags combined with transactional red flags should raise concerns and prompt further investigation; refer to the below grid for the list of potential red flags.

Behavioral red flags

Unwilling to answer questions If a customer sounds confused and/or does not have a suitable knowledge on the nature/purpose of the initiated transaction, you should ask them for further details to understand this particular scenario and rule out a potential consumer fraud.

Sending to an unknown receiver If a customer is unable/struggles to pronounce the counterparty's name, seems unfamiliar with the receiver's (if sender) or sender's name (if receiver) (e.g. has to check the name written on the receipt/paper, asks someone in the background etc.) and/or admits they never met the receiver in person, you should ask them for further details.

Sending with a third-party involvement You should question and have a better insight into all third-party sends; relationship between the sender and involved 3rd party will give you complete information, so you should always focus on that part.

Partial information on a transaction purpose and/or relationship between counterparties If a customer voluntarily provides partial information regarding the transaction purpose and/or relationship with the counterparty, and the provided information implies one of the common fraud scenarios, you should ask them for further details.

Transactional red flags

Different names origin/place of birth Sender's names origin differs from receiver's, e.g. Jim Smith in US sends money to Akash Singh in India.

Transaction corridor Sender sends to a distant country that does not seem to be related to the sender.

Probing Questions

Asking for transaction purpose and relationship between the sender and receiver is the first step in detecting consumer fraud.

• Senders may not recognize they are victims of fraud and it is MGI responsibility to prevent them from being defrauded by perpetrators.
• Always keep the conversation positive and focus on what we can do, what information we have and how we can help.
• Take into account the below indicators to accurately detect a potential consumer fraud scenario.

Length of relationship

• Type of relationship (online or real-life)
• Purpose (remittance, purchase, investment, etc.)
• Circumstances behind a transfer and level of urgency (casual, urgent, sudden, etc.)

1. Gather a transaction purpose and relationship between the sender and receiver/third party, and compare them against common fraud scenarios and purposes characterizing them; refer to Common Fraud Scenarios below.

2. Proceed based on what you determined and who the caller is.

When you determined that the transaction is Potentially fraudulent and the caller is a Sender: a. Advise them as per Consumer Fraud Prevention Education below. b. Complete Sender Refund.

When you determined that the transaction is Potentially fraudulent and the caller is a Receiver: a. Inform them to have the sender call MGI for further assistance. b. Complete Placing Transaction on Hold.

When you determined that the transaction is Valid and the caller is either isSender or receiver: a. Proceed to assist with the caller's inquiry using standard procedures/processes.

1. Ensure the case description includes all the information gathered from the customer and justification of your decision.

Consumer Fraud Prevention Education

Provide a customer with the below explanation guidance.

• MGI and its systems are dedicated to ensuring customers' security, and preventing them from losing their funds.
• Your transaction has been reviewed and based on the available information, MGI determined that it closely resembles past scam scenarios where our customers lost their money.
• As a result, your transaction appears unsafe for you and MGI, and therefore we decided that we will not process it and only make it available for a refund.

In addition to the above explanation, advise a customer of the below to help them avoid being victimized in the future.

• Do not send money to anyone you do not know.
• Screen your calls and make sure your callers are genuine.
• Never provide confidential information to strangers calling.
• Change your phone number or reach out to your phone company to block specific calls/numbers.
• Instructions to mislead/not provide truthful responses to MGI are a clear warning sign that something might be wrong; if someone tells you to not share details of your transaction with MGI, do not continue with the transaction.
• If needed, seek help from local organizations, Law Enforcement and your family members; refer to Victim Resources.

Unauthorized Use of Personal Information (MGO Specific) Below table contains MGO-specific scenarios associated with an unauthorized use of MGI customers personal information; they do not represent consumer fraud.

Case 439/Microsoft Customer receives a call from someone saying they are from tech support and offering to fix their computer; victim then provides their credit card information. Fraudster is typically logged into their victim's computer remotely, sets up an MGO profile and starts sending transactions with the victim's information. Common relationship: tech support/Microsoft/IT employee Common purpose: fee for fixing PC

Phishing Consumers and agents may receive calls, e-mails, faxes or even visits from people pretending to work for MGI, who try to lure them into releasing (phishing) personal information, e.g. Social Security Number, driving license number, login ID, password or agent information, such as agent number, PIN, account number, etc.

Warning Signs

• Sender receives an e-mail with the link redirecting them to the fake website, which requests personal information (URL should be collected and reported to the supervisor).
• Sender sells an item and receives a fake confirmation that the payment for the item was made via MGI.

Common relationship: MGI representative Common purpose: personal information