Western Union has known for years that scammers were using its system to commit huge amounts of fraud, according to the Federal Trade Commission.
Even when faced with evidence that many of its agents were committing fraud, Western Union kept taking people’s money and sending it to scammers. The company has sent billions in fraud-related transfers since January 2004.
In a global settlement with the FTC and the U.S. Department of Justice, Western Union has agreed to return $586 million to consumers and create an anti-fraud program.
From January 2004 to August 2015, the Western Union received more than 550,000 complaints about money transfers made for fraudulent lottery and prizes, family emergency calls, advance-fee loans, online dating, and more, according to the FTC. The company had internal reports, which flagged fraud by some of its agents, including many international agents that paid out fraud-induced transfers from U.S. consumers. And there were warnings from U.S. and international law enforcement about the fraud. However, nothing was done, said Bridget Small, consumer education specialist for the FTC.
Under the settlement, Western Union will return $586 million to consumers. The company will train and monitor its agents so that consumers are protected. It won’t be allowed to transmit a money transfer that it knows – or should know – is a fraud. Western Union will block money transfers to anyone who has a fraud report, make it easier for people to report fraud, give clear warnings to people who are sending money, and refund a fraud-related money transfer if the company didn’t comply with its own anti-fraud procedures.
If you ever wire money, keep in mind that it’s illegal for a telemarketer to ask you to pay with a money transfer. Scammers like using money transfer services because once you send the money, it’s gone forever, Small said.
If a telemarketer asks you to wire money, you know they’re a crook. Don’t wire the money, and then report it to the FTC.