$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

In 2006 I was scammed for about $5000.I regret I didn’t listen to my husband and my mother, but unfortunately the truck that I thought was going to be delivered to me never was. I called the police and they stated that it was nothing they could do. If possible, I would definitely like my money back!!!

Western Union recently deleted my account after I received a bank levy on my bank account. I had informed Western Union Management that the Massachusetts Child Support Division was looking for a transaction history report from me, for the last 10 years of child support payments I had made through their platform. Right after that phone call my entire account no longer existed and I had no access to any of the transactions that I had made over the course of 10 years or more. I believe Western Union deleted my account due to fraudulent activity on their part. Perhaps they did not want the government meddling around into back logs of conversion fees that were inaccurate?! Perhaps I paid too much to their service over the10 year timeframe so they didn’t want to get in trouble. I would like an investigation to unfold to see if they owe me money. My intuition tells me they were attempting to hide that data and they didn’t want anyone to dig into it and figure out what they had done. It is illegal to delete a financial accounts without proper consent, right? Do I have a case?!

I was scammed in 2010 of about $4,000. I too used Western Union to do this transaction. I would love to get my money back.

Why are they asking for my Social Security Number. That has nothing to do with a wire transfer. I smell a rat...

In 2012, I was a victim of a scammer for $4000.00 and reported it to the WU supervisor/manager in Manhattan Branch. My recepient was from London? and I was asking if there was in any way the person who picked up the money can be identified thru the security cameras, but seemingly he was not of great help. I filed a complaint with the transaction numbers in it thru the manager. Thanks God after all, my prayer has been answered. Hopefully I could have my hard earned money back.

I was new immigrant, from a very needy family. 2,950 dollars was a lot for my family. I was the 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. Family cried, I cried for days and months, talked to Western Union but they told me that there was nothing they could do.

I wired money via Western Union to purchase a car. The scammer told me he would ship the car. I lost $2000.00

My elderly mom lost almost €60,000 to Nigerians scam from letter sent to her home claiming she won the lottery in Spain in 2012 . The funds were wired through WU from Trinidad to Spain. I contacted Western Union fraud department and other federal agencies but nothing happened about this situation.... is there possiblity she would get her money back ?

From what I understand if any money was lost VIA Western Union, they are entitled to reimbursement.

I hope the MOneyGram can also be investigated. I'm sure a lot of scammers have use it too.
I was scammed sending money through Money Gram.

My father has been scammed 4 times for approximately $10,000 . He was too embarrassed to report to police ( he barely admitted it to me ) and I do not know if he has the receipts. From what I was told , he took money from his bank account and then went over to Western Union and wired the money somewhere in Africa. He supposedly won a car and money. This happened 4 times, that I know of, within the last 2 years. Can he still file a claim without receipts. Would Western Union keep records of all transactions for the last 2 years that we could access ?

I received a letter in the mail and had to double check the letter to if it was true. I sent money for a job and as soon as I found out it was fruadulent I filed a police report and called western union. Gave them all the information. After four years I'm glad I'll get that money back.

I am so happy this has been dicovered! I was scammed to almost 4000.00!! They made the fakest but realistically ebay account ever!! Once,I sent my money they deactivated their email account and some guy with an accent said I am sorry after I cried and cried! I pray this settlement is real and I get some of my money atleast! Wow

I lost 2 $2500 money transferred to Africa through Western Union, The receiver stated that he was an attorney in Ghana and a distant relative of mine had been killed in a car accident, and he was wealthy. The government would get hold of the funds and not release them until I notify them and send 2 $2500 money orders to have money released!

They should be doing more than just refunding I lost 500$ 2 weeks before christmas my children didn’t get a Christmas because I was scammed they should be paying for grievances that they caused to

In 2015 I was victim of a fraud from the Philippines through Western Union. I immediately reported it to Western Union and to the police here in Italy, but they both said there was nothing they could do. Today I've received from the US Dept of Justice notification that I can file a claim, which I have done just now. I'm deeply grateful to this system which works and helps citizen!

iwas scammed for 800$.but it could have been more. I was taken in by the secret shopper scam. the worst part is after the first transaction the scammer sent a msg saying what a great job I did and they had a new job for me the next day I received to united states post office money orders for 975$ each that I was supposed to deposit in my bank and then go buy some high end electronics as the "secret shopper"I was to get 400$ for my evaluation of customer service. like they say if something seems to good to be true it usually is,so I went to the post office and asked the clerk if the money orders were real she said yes they looked right then the postmaster came out and said let me see them as he held them up to the light there was no watermark ! ididnt even know they had one apparently neither did my bank or the postal worker ,so I contacted my bank and the police but no one did anything my bank held me responsible took 800$ plus overdraft charges froze my account until I could borrow $ to repay them but the police nor the post office wanted the fraudulent money orders in my possession? you would think that it is a federal crime they would at least investigate the names and addresseson on them or check for fingerprints or something ,,in the meantime at the police station filing the report the scammer is aggressively txting and now calling wondering where the electronics are handed the phone to the officer and scammer hung up.never answered it again.

DOES ANYONE HAVE ANY CONTACT DETAILS TO REGISTER A CLAIM?

I got a letter from Gilardi & Co regarding the lawsuit against western union. But they are asking for my social - really? Is this yet another scam or legit?

I have spoken with the powers that be concerning this fraud perpetuated by Western Union. I have given them all pertinent transaction details. I have given them my email address. I have given them my home phone number. I have yet to receive any correspondence, ie. Email or any new post's regarding the progress of any ongoing settlements. Where are you!! You are supposed to be repaying monies which this law suite demands. Please up date your information on this matter.

Currently, I received a letter/form from United States v. The Western Union Company with Claim#: WUU-10190050-3. It is not a fraud, right? Just check to make sure for the personal information is safe before mailing back.

Would people be getting their money back who were duped during Nigerian scam which was published in a news report published a few days back

I have been being scammed for years thru western union! Most of them were sent to Nigeria! It was anywhere from 15,000 to 20,000 dollars! I was always promised to receive money back but never saw anything back I filed many police reports but was told that they couldn’t help me

I lost $1,200.00 11 years ago. The fraudster posed as a legitimate seller of a Musical Keyboard that I thought I purchased. By the way, I sent the money by way of Western Union. After about a week and dozens of attempts to contact the seller, I realized that I had been conned. I tried everything to get relief and was told basically there was nothing I could do. A couple of months ago, I received a letter informing me that I would be receiving money from a huge lawsuit. Believing that it was just another scam letter, I almost trashed it until I noticed that the amount that was promised to me was the exact amount of money that I lost years earlier. After much reading on the Lawsuit, I was convinced that it was a legitimate document an I sent the completed papers back. At this point, I'm still not completely convinced that I will be getting the money back that I lost. What keeps going over and over in my head is "If it sounds too good to be true, it probably is". I'll just wait and see.

What if my claims involve with multiple transactions with Western Union, I don't even remember when they occurred anymore, do I have to sum up a random total or had to be specifically listed on each of them?

BETWEEN MYSELF AND MY LATE HUSBAND, WE LOST OVER $20,000 I WAS SENT CLAIM FORMS FROM A LAW FIRM HIRED BY THE DEPT OF JUSTICE NAMED GILARDI & CO., LLC ARE THEY FOR REAL OR JUST ANOTHER SCAM?

Does anyone worry about filling in your SS# ? I did. But had to file online. For originally ripped the paper. Taped it back just in case It's true. $2,700 went to some lucky person in Trinidad. Filed a case with my hometown authorities who tracked it.

when are they suppose to send checks out to people?

I lost about $1000.00 to a man in African

I received the letter as well but I’m really iffy about filling it out because it asked for my social security number in order to receive my money back. How do we know this is not another scam?

If you are a consumer with questions about the Western Union refunds process, the best sources of information are these answers from the FTC and this recent post on our Consumer Blog.

I was scammed out of $2250.00 by supposed member of the U.S Army. Police did zero for me

I was scammed by a "nephew" who was held in Tijuana Mex. they wanted $800.00 within an hour or else they were going to disappear him. I sent the $ and they called again asking for a $1.000 I told them I was calling the police and they hanged up. I made a police report, they could not do anything about it.

I was scammed out of $400. I asked the Western Union lady if she was sure that they couldn't cash it without the number. She said yes. I hid the number from them when I sent a copy of the receipt but all they needed was my name to cash it. BEWARE

I filed a claim on line because I was a victim of western union but I have not heard any thing from anybody. Has anyone else received in information?

I borrowed 4500 dollars to buy my daughter a car. They had a ebay account they had a paypal account and it all looked so real it happened back in 2009. When I realized 24hrs later it was a scam it was to late. The people were no longer available and would not contact me back. I even tracked the car down by the vin number and it was some ones car. I really hope I get 1/2 of this money back if not all. I filed a claim back in 11/17 but have not heard anything. How long does it take?

Hello similar situation except my bank account continued to be tampered with. Watch for double charges for things you already paid for 1700 was sent out but extra funds were continuously missing. My bank account was even drained right in front of me.. I filed several complaints to FTC. I heard a very demeaning laughter as well after the theft occurred. Contact the Federal Trade Commission, FDIC, and the attorney generals office as well. My theft occurred in 2012 with recurring theft until 2015. I hope this helps.

when will i recieve my money through the class action lawsuit through western union

The deadline for consumers to file refund applications has been extended to May 31, 2018.  You can check the FTC's Western Union refunds page for more news.

Everyone has a similar story, its a shame that Western Union knew of these scams and did nothing to rectify the situation... Western Union had the nerve to send me a discount card after I reported my scam and concerns as to say it's your loss but just im case you get scammed again we'll give you a discount... I'd asked to speak to management and gave him a piece of my mind was scammed out of almost 3K and was told there's nothing they can do.... I'm so happy this company has this big of a lawsuit against them... I will never and have not used Western Union since then....

Ridiculous!! All of you. You were stupid enough to fall for a scam and send a bunch of your money to either someone you’ve never met or heard of or some other way you were tricked and now you think Western Union deserves to pay you back for YOUR stupidity. How embarrassing. FTC might be the ones running ithe suit but it’s because they can’t blame or charge the actual culprits so they point the finger at Western Union and say that they have to pay some of it back because a bunch of you went whining to them saying someone owes you for being a sucker. And all of you idiots jump on the band wagon because you were wronged when it wasn’t theIt faults. I laugh at all of you pathetic people suing for a scam that you were dumb enough to fall for and want someone to pay for your stupidity. Ha!

Lost over $5,000.00 made me ill almost had a nervous breakdown behind it...

there is very clear discrimination and retaliation going on by western union on anyone who tries to use western union service since they are part of this lawsuit . western union refuses to send money or us victims without any reason given in retaliation as part o tis lawsuit federal govt needs to arrest and investigate western union or this retaliation

I got scammed December 2016 for $1248 and when i called they told me they couldnt do anything.and I just learned about this cause they didn't have my right address. Now i can't do anything.

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