$586 million Western Union settlement: Be careful about the company your company keeps

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“For many years, Western Union’s money transfer system has been used by fraudsters around the world to obtain money from their victims.” That’s how the FTC’s complaint against Western Union opens – and it tells a compelling story of a corporation the FTC says knew that massive fraud was afoot and had the ability to address it, but chose to look the other way. It didn’t end there because according to the lawsuit, even in the face of obvious evidence that many of its own agents were complicit, Western Union ignored it while pocketing massive cash. The global $586 million settlement, which also resolves separate Justice Department criminal investigations into the company’s failure to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act, sounds a cautionary note for other businesses to consider the company they keep. 

Many people use Western Union’s money transfer system to send money to family and friends, but Western Union also was a fan favorite of crooks and con artists around the world. According to the lawsuit, the company’s own in-house data documented that. 

For example, between 2004 and 2015, Western Union received 146,909 complaints about bogus online purchases, totaling at least $187 million in losses. Fraudulent lotteries accounted for another 75,543 complaints, totaling $86 million in losses. And those “Wire money to get me out of jail!” scams that target unsuspecting family members generated 41,897 complaints and at least $73 million in losses.

Of Western Union’s total network of 515,000 agents, the FTC says a small number account for the vast majority of consumer complaints. You’ll want to read the complaint for details, but here’s just one example. In 2012, Mexico had 17,710 Western Union agent locations, but 137 – less than 1% of them – accounted for more than 80% of the reported fraud. And those are stats based on Western Union’s own documents.

Sky-high consumer complaint rates were just the start. Thirty-nine Western Union agents have been charged in the U.S. and Canada for crimes like mail fraud, wire fraud, or money laundering, with more than 100 arrested by law enforcement agencies in other countries. Some were prosecuted for being in cahoots with con artists. Others were charged with setting up their own scams.

But even in the face of consumer complaints, criminal prosecutions, a 2005 settlement with AGs from 47 states and the District of Columbia, a 2009 FTC action against competitor MoneyGram, and warnings from the U.S. Secret Service and authorities in Canada, Japan, the U.K., Spain, and elsewhere, the FTC says it was business as usual for Western Union. In certain countries where Western Union was at a particularly high risk for use by criminals – Nigeria, for example – Western Union had rarely, if ever, terminated an agent for fraud as of October 2015.

Among other things, the lawsuit alleges that despite what Western Union knew, it failed to take prompt action against agents with high levels of consumer fraud, didn’t conduct adequate background checks of prospective new agents or those up for contract renewal, didn’t adequately train and monitor its agents, and failed to adequately record consumer fraud complaints. In addition to violations of the Telemarketing Sales Rule, the FTC alleges that Western Union’s failure to take timely, appropriate, and effective action in the face of fraud-induced money transfers was an unfair trade practice.

The settlement imposes the $586 million payment and requires Western Union to put a comprehensive A-to-Z anti-fraud program in place, complete with meaningful training and monitoring to protect consumers in the future. The order also prohibits the company from transmitting a money transfer it knows – or reasonably should know – is fraud-induced. In addition, Western Union will have block money transfers to anyone who is the subject of a fraud report, provide clear and conspicuous warnings to consumers, make it easier for consumers to report fraud, and refund a fraudulently-induced money transfer if the company failed to comply with its anti-fraud procedures.

Two related reminders:

  1. The FTC amended the Telemarketing Sales Rule recently to ban telemarketers’ use of pet payment methods favored by fraudsters, including cash-to-cash transfers like the kind offered by Western Union. 
  2. The scope of the FTC Act is broad. Monitor what others are doing on your behalf and take consumer complaints seriously. Don’t dither when you have reason to smell a rat.
     

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NOTE FROM THE FTC ADDED ON JANUARY 8, 2018.  If you are a consumer with questions about the refund process in the Western Union case, please visit the FTC’s Western Union refund page for more information. Also, we have a new post on our Consumer Blog that addresses issues that may be on your mind.
 

 

Comments

Beneficial Owner of billions in securities that were also being fraudulently transferred through Western Union in this last year.

I hade a lot of problems with Western Union

I was a victim of fraud through Western Union. I went to the police to report it, but they told me that there was nothing they could do. So I didn't even know about this lawsuit - I lost a little over $3000 and I would like to have that back.

The Department of Justice is developing a refund process, and we’ll post more information when we have it. Meanwhile, if you used Western Union to send money to a scammer, you can report it to Western Union’s complaint department at 1-800-448-1492 or online. Make a note of the date you filed the complaint with Western Union, and be sure to keep any documents you have about the scam and money transfer.

 

If you sent money to a scammer then it’s your fault not Western Union. Shame on all of you for trying to make them pay for your idiocy. Lol. If I were stupid enough to have fallen for a scam I wouldn’t blame the institution I sent it through, I’d blame myself because I was the moron... look in the mirror folks and blame the right person.

My Dad had been frauded out of a bit over $1500.00 I turned it over to the police they investigated 'll the way to FL. But it had came from Nigeria. I received a letter today for him to receive his money back , by a lawyer named Gilardi &Co. LOC. Me being cautious, is this letter for real? Is it true? Or Just another Fraud way to get more money from my Dad.?

Same thing here, received it Friday last. Asking the same question

Ditto! My mom received the letter, as well. However, since it asked for nothing other than her agreement as to how much was pilfered from her, we sent it back duly signed and dated. We'll now see what occurs.

Me too I got one but I sent mine in right away!! I hope it’s true I want my money back!

A letter just arrived today 0 U.S. vs Western Union, Gilardi & Co LLC. I'm hesitant to fill in the social security number in case it's another scam.

I also am really nervous to fill out the social security number portion. Why is that necessary?

I also received letter needing to fill in social has me cautious as well...same law firm

I am now very hesitant to respond to anything as well. I hope it is legit, and people are all refunded what they lost.

I lost $2900. I called the FBI and the police and they said that unless it happened to more than just me, they could do nothing about it. then I got the letter in the mail from the Federal Government about this suit.

Me too I sent 4,500 through western union in2011 and I filed a complaint police report and everything!!

Same here they gave me the runaway sending me city to city. The scammers was so good that the phone call Id stated the owners name of the property so I thought it was correct due to caller id matching the caller even that was bogus

I lost $20,000 back in 2000's. Can I get part of that back from the Nigerian scam

ITS your mistake..You believed in million money will fall to you from the sky ?? Probably you kept it secret )) so nobody lend from you money) Next time-open your eyes real wide,,

I lost over fifteen thousand from the scams that started in Nigeria. Please advise.

western union will not return my 75.00 and wants me to show them a government ID. all I want is my money back

this is the MTCN number [Admin note: number deleted] they will not return my money

Yes I was one of the unfortunate people using Western-Union at the time and had lost many dollars through all the scams from West-African countries. They have never apologised even though some of their franchisee managers were keeping all the sent money from us foreigners and jailed for their illegal acts.Western-Union have the money to pay the fine of $586,000,000.00 and should repay all the money scammed from foreign customers.
Our local Western-Union have cancelled all money transactions from New Zealand and Australia to West-African countries effective from mid-October 2016. Our Western-Union Head office is in New South Wales in Australia.

I've experience scams via third party debt collectors. If you pulled my credit report, check systems and gathered statements from Embassy, Myself and others you would welcome me as a participant in Class Action. We're speaking over a decade. Please note I have poor Vision another story.

I am a victim of the get out of jail scam. [Admin note: Personal information deleted]
filed police report

I send money through Western union in September 2016 to my receipt. He went to western union outlet to collect the money and was told that the money has been collected already. I try to contact Western union for clarification but was not successful. II is almost $4,000. I need my money now.

Unfortunately, I lost $. 5600 to numerous lottery scams. I hope that get refund from 2013-2017.

I lost $5000 if I recall thru a fraudulent ebay transaction followed up by email correspondence and a payment sent by western union. I filed the fraud with ebay and law enforcement. I would like to know if I am eligible for this reimbursement and how to be included.

My story exactly...I filed a complaint with ebay, FBI and Western Union had the culprit on camera, but unwilling to give the information to me.

FBI won't touch it unless it's over $100K

Me too an eBay fraud sent 4,500.00 called western union right away made a police report here and in the United Kingdom! Where fraud happened! And I just got that letter too like last week but I sent it back right away! I need my money back!

I lost thousands of dollars through a fraud scam in Ghana. Gave my heart out to someone I thought was real. The woman (profile) turned out to be fake. Don't even know if the scammer was a man or a woman. Sent about 30 transfers to this 'person' through Western Union. Each one was anywhere from $100 to $300. Even purchased a $1,500.00 plane ticket for that 'person' to travel to me. Even though it was never used, the airline will not refund it to me. So what do I do know..? I have all of my receipts for the transfers. Will I be helped by the Western Union lawsuit..?

How is that western unions fault

It is western union's fault because the scammers who went through Western Union used them knowing that the money would be available ASAP. Western Union would not back those scammed, and allowed these scammers to continuously use their WU accounts.

If one has contacted the entity and informed them of the problem they could stop a person from actually retrieving the money. It could stop right there. Instead they did not appear to want to help with the issue. They should of address all the issued that were presented and now they are paying much more years later.

Back in 2007 I wired money via Western Union to purchase a car for my daughter. The scammer told me he would ship the car. I lost $2500.

I got jipped on the same scam. Burns my a$$ Every time I think about it. Luckily at the time I made the right phone calls to western union and go. Hopefully I get to see my money again. Good luck with your battle

In 2009 I was looking for a job on CL.org. I found a person assistant position and emailed the "man" who wanted to employee me. After several emails back and forth, I agreed to do the first job for him. My "job" was to pick up his mail and ship any mail for him in the US, since he was "busy" in Australia on an art business trip. He sent me an envelope w/a fake corp check & I deposited into my acct w/Chase Bank. Chase took the check, deposited into my acct & asked me to wait 2 business days before withdrawing any of the money. As an honest person that I am, I returned 2 days later withdrew the amount for myself as my pay & withdrew the rest to ship to his business partner in Ohio through Wester Union. I did & 3 days later I found out the check bounced!
I was part of the NIgerian Scam. The money was now gone, Chase held me accountable for thousands of dollars! And I was left w/no help from the Police, USPS, FTC and BBB.
I want retribution and to clear my name!!!!!!!!!

I had similar experience with Chase Bank. I deposited a check which I thought was legitimate, when I went back to get the part of funds which should have been cleared, I was treated like a criminal and my account was closed forthwith.

I was scammed by a woman for $12,000 in cash. I recently filed a police report, and the officer told me that no matter what country is on the transfer, it can be cashed anywhere, and all they need is the MTCN number. If it has Nigeria on it, your neighbor in the states can go and get the money. Western Union enabled these crooks, with this system. When I requested a list of the money wires I sent, WU said they would have it in the mail, and I have never seen it. How do I file a claim? Anyone know?

I lost 75,000.00 befor I new it was a scam my hold life savings

It's not western unions fault that you are scammed out of your money, if you aren't smart and aware it's your fault..

Your right its not there fault but they continued to let it happen. they were making money so they didnt care

Some of the scammers were actually Western Union employees. In other cases, they knew the insanely high volume of complaints against fraudsters that were acting as agents of Western Union. They not only permitted fraud, they KNOWINGLY permitted, and in other cases, committed fraud.

Yeah I'm a victim..1.300..I got a call from Colorado investigation Bureau ...I'm not happy I post over 4.000...n I hope I get what I sent to the UK..1.300...

Have check's been mailed out..any update's on when check's will be mailed...thank's to all for all update's

I called them every week in January bc they said the checks would be mailed out in January...on the 31st they claimed the court pushed it back to February...but how and when in February?! Its my money and I want it now

Where can we submit a claim for monetary issues due to this fraud. I lost $700.00.

Rolando Aguirre
[personal information deleted]

In 2006 I was victim of a scam I lost 3500 I made a police report I got a check I cashed it (credit union cashed) they said to sent back western union and I would receive large amount tried to call no answer I could really use that money

We have/are dealing with these horrible scammers that prey on the elderly for huge amounts of money. If even a percentage of money could be returned, it would be a blessing. How these people can do this to anyone, much less the elderly and sleep at night is far beyond my understandings. Thank you to the FTC for pursuing and all hard work done involving this matter.

My elderly parents were called by a "cousin" who lives in Houston, and was supposedly in trouble in Mexico while on a trip with his family.This man kept them on the phone as he cried and pleaded for help. My parents were very stressed, and panicked for him. The man also put a woman on the phone as his wife, and she cried as well. They didn't allow them to hang up, until the money was picked up. They kept then on a high stressful level of alert. We called Western Union, but they said, they couldn't do anything about it. They took a report, but we haven't heard back from them.The local police took a report, but couldn't do anything, as it was picked up in Mexico. We got scammed $700.00.

Yes I was victim. In 2006 i stay in las vegas looking for a home in los angeles. I was scam for 2000.00 believing i was getting a home in Los Angeles. I sent the 2000.00 thur western union, waited 5 days for the carrier to bring me the keys. Well once the 6 day came and phone number was disconnected right then i knew i was scam. I have 5 kids. I became homless and my kids got taken from me. Can u plz include me in the lawsuit. I want my money back.

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