MoneyGram Fraud

We offer MoneyGram services at our convenience store. A fraudster called our employee and conned them 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. When we were setting up originally, MoneyGram made us create new access codes for employees to login and process money transactions. We did not give access or access codes to this particular employee to login and perform transactions The fraudster gave the access code to employee to login and process transactions. We later realized that there is a default access code for the computer. MoneyGram neither disabled 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?

Asked on April 18, 2017 under Business Law, Arkansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

No, if you agreed, as you write, to be responsible for all funds lost including due to fraud or theft, from your location, you contractually obligated yourself to compensate Moneygram for this money--you agreed to pay them under circumstances like this, and can be held to that agreement. However, since your employee was seemingly negligent or careless, you could sue him to recover from him any amounts that you have to pay out due to his unreasonable carelessness.


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