MoneyGram International Inc. (MGI) will pay $18 million to settle charges that it allowed its money-transfer system to be used by telemarketing scammers who bilked Americans out of tens of millions of dollars, the U.S. Federal Trade Commission announced Tuesday.

The FTC alleged that MoneyGram agents assisted fraudulent telemarketers who fooled American consumers into wiring more than $84 million to locations in the United States and Canada. The scammers told victims that they had won a lottery, were hired for a secret shopper program or were being offered guaranteed loans, the FTC said.

MoneyGram ignored warnings from law enforcement that its network was being used to facilitate fraud, the commission alleged.

The $18 million in settlement money will be used to compensate victims, the FTC said.

Under terms of the agreement, Minnesota-based MoneyGram will implement anti-fraud and monitoring programs.

The company is the second-largest money-transfer service in the United States, behind Western Union Co. (WU).

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com