MoneyGram Fraud - Responsibility

[couger]

What is the name of your state (only U.S. law)? Arkansas


We offer MoneyGram services at our convenience store. A fraudster called our employee and conned into transferring over $10,500 to some random people.

We did sign a contract with MoneyGram essentially stating that "we agree to safeguard and be responsible for all MoneyGram funds lost for any reason, including theft or fraud".

While we do not dispute the above, here are other relevant facts:
1. When we were setting up originally, MoneyGram made us create new access codes for employees to login and process money transactions.
2. We did not give access or access codes to this particular employee to login and perform transactions
3. The fraudster gave the access code to employee to login and process transactions.
4. We later realized that there is a default access code for the computer. MoneyGram neither disable this code nor inform us.

If not for this default code, there is no way these fraudulent transactions could have taken place. Is there anyway we can fight MoneyGram in taking up the responsibility or do we just take it up on us and pay all of the money to MoneyGram.

 

[Zigner]

Your recourse is laid out in your contract. If you don't understand your contract, you may wish to have it reviewed by a local attorney. Your situation is specific enough that it requires a level of "advice" that goes beyond that with which an internet forum can assist.

 

[adjusterjack]

And you aren't pursuing the "fraudster" because?

 

[quincy]

What is the name of your state (only U.S. law)? Arkansas


We offer MoneyGram services at our convenience store. A fraudster called our employee and conned into transferring over $10,500 to some random people.

We did sign a contract with MoneyGram essentially stating that "we agree to safeguard and be responsible for all MoneyGram funds lost for any reason, including theft or fraud".

While we do not dispute the above, here are other relevant facts:
1. When we were setting up originally, MoneyGram made us create new access codes for employees to login and process money transactions.
2. We did not give access or access codes to this particular employee to login and perform transactions
3. The fraudster gave the access code to employee to login and process transactions.
4. We later realized that there is a default access code for the computer. MoneyGram neither disable this code nor inform us.

If not for this default code, there is no way these fraudulent transactions could have taken place. Is there anyway we can fight MoneyGram in taking up the responsibility or do we just take it up on us and pay all of the money to MoneyGram.

You should, if you haven't already, report the "fraudster" to the police. You are contractually obligated to MoneyGram to cover the $10,500 and you seek reimbursement from the thief through a civil action.

I am surprised that a convenience store would not have a lower limit placed on transactions.

I see no legal action for you to pursue against MoneyGram. I agree with Zigner that consulting with an attorney in your area for a personal review would be smart.

 

[LdiJ]

You should, if you haven't already, report the "fraudster" to the police. You are contractually obligated to MoneyGram to cover the $10,500 and you seek reimbursement from the thief through a civil action.

I am surprised that a convenience store would not have a lower limit placed on transactions.

I see no legal action for you to pursue against MoneyGram. I agree with Zigner that consulting with an attorney in your area for a personal review would be smart.

I am not sure that I agree with the bolded. There was an access code that the store was unaware of that was used to make the fraudulent transactions. That should not have been possible.

 

[NIV]

I am not sure that I agree with the bolded. There was an access code that the store was unaware of that was used to make the fraudulent transactions. That should not have been possible.

While I agree with you from an equity perspective, what is the tort committed by Moneygram? (If the code issue is true.) More likely, it would be a contractual issue--but I don't know the contract. Some argument along the lines of each party to a contract has an implied duty of good faith and fair dealing in their acts. By failing to secure or disclose things like a default password cougar was harmed.

That is not an easy argument and it might cost more than the amount demanded to make in court. (If there is a loser pays provision in the contract, it might be worth it for cougar to shop it around to be sure.)

 

[quincy]

I am not sure that I agree with the bolded. There was an access code that the store was unaware of that was used to make the fraudulent transactions. That should not have been possible.

I worded my statement as I did, folllowed by advice to see an attorney, because just because I cannot see a legal action to pursue doesn't mean there isn't one. I haven't read the contract between MoneyGram and the convenience store and I do not have access to all of the necessary facts.

I would be willing to bet, however, that the contract with MoneyGram sufficiently protects MoneyGram from civil actions arising from fraudulent transactions.

Because of the amount of money involved, I advise again that couger seeks out a personal review from an attorney in his area.

 

[Zigner]

As I re-read the OP, I would begin to suspect that the employee may have been complicit.

 

[quincy]

As I re-read the OP, I would begin to suspect that the employee may have been complicit.

It sounds a bit like that to me, as well.

I also question the $10,500 figure.

There is much that puzzles me about this described situation.

Whatever is going on, though, I find it difficult to believe that MoneyGram could be held liable for the fraudulent transaction.

 

[ALawyer]

If You Have A Business Owners Policy

You may also want to check your insurance coverages. If you have one or more business owners policies, depending on the nature and form of coverage, there might be is a chance (not a likelihood) that the language of the policy would cover the potential loss as a theft or fraud loss -- provided it is promptly reported. Aside from that, the advice you've been given by others about reporting the matter to the police and contacting a lawyer to review the contract with MoneyGram makes sense.