ST. LOUIS PARK, Minn. (Legal Newsline) - A troubled wire transfer company settled with 45 state attorneys general Wednesday, agreeing to provide fraud prevention education services.

MoneyGram Payment Systems, Inc., will fund a national consumer awareness program with $1.1 million. The program will provide a national peer-counseling program and put consumer warnings on the forms used to wire money.

According to the attorneys general, con artists prompted the settlement, which can be viewed here.

"Wire transfer scams are one of the fastest-growing forms of fraud throughout the country," Washington Attorney General Rob McKenna said. "The initial pitch can take many forms but they all end with the con disappearing with the victim's money."

"We need to make it tougher for scammers to use traditional methods of transferring money to rip off consumers. Agreements like those the attorneys general have reached with Western Union and now MoneyGram help reduce fraud-induced wire transfers by teaching consumers and money transfer agents how to recognize these schemes."

Moneygram has more than 25,000 locations in the United States and more than 100,000 around the world.

According to the terms of the Agreement, MoneyGram will:

-Display prominent warnings to consumers of the dangers of fraud-induced wire transfers in English and Spanish on the front page of MoneyGram's Send Form, and comparable warnings are required for telephone and Web transfers;

-Pay $1.1 million for a national consumer education program on how to avoid fraud-induced transfers, to be overseen by the AARP Foundation;

-Continue its current policy of reimbursing the amount of any transfer to a consumer who requests, prior to pickup, that the transfer be stopped, and reimbursing transfer fees as well if the consumer reasonably claims that the transfer was fraud-induced;

-Send prominent anti-fraud messages to its agents electronically every month or whenever a proposed transfer exceeds a certain amount, revise and enhance the company's agent anti-fraud training programs, and provide special training to agents with elevated fraud levels at their locations;

-Take appropriate action to suspend or terminate agent locations that are involved in fraud or that do not take reasonable steps to reduce fraud;

-Block wire transfers from specific consumers or to specific recipients when the company receives information from a state that there are good faith grounds to believe that fraud will occur, until such time as the consumer is counseled on fraud and requests resumption of the transfer.

MoneyGram recently lost approximately $1.6 billion in investments in the subprime mortgage market, a report in the Minneapolis Star Tribune shows.

The head of the company, Philip Milne, also recently resigned and received an almost $10 million severance package.

In less than a year, the company's share price has dwindled from more than $30 to $.84, recorded Friday.

The following states participated in the agreement: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wyoming, and the District of Columbia.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.