Posted: 2/7/2017

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Western Union has agreed to settle a lawsuit brought against them by the FTC and the U.S. Department of Justice for their part in fraudulent transfers. According to the settlement, Western Union will pay $586 million in refunds to consumers that were defrauded. The global money transfer service provider admits to knowing for years that scammers have been using their system to commit fraud and that they ignored evidence that many of its agents were involved in the fraud. The more than half a billion dollar settlement is the largest forfeiture to date against a money services business.

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Western Union has agreed to settle a lawsuit brought against them by the FTC and the U.S. Department of Justice for their part in fraudulent transfers. According to the settlement, Western Union will pay $586 million in refunds to consumers that were defrauded. The global money transfer service provider admits to knowing for years that scammers have been using their system to commit fraud and that they ignored evidence that many of its agents were involved in the fraud. The more than half a billion dollar settlement is the largest forfeiture to date against a money services business.

According to the FTC lawsuit filed January 19, 2017, from January 2004 to August 2015 Western Union received more than 550,000 complaints about money transfers made for counterfeit transactions. The phony transactions included lottery and prize shams, fake family emergency calls, advance-fee loans, online dating schemes, and more. In addition to the complaints, Western Union also received internal reports which flagged fraud by some of their own agents, along with fraud warnings that the company ignored from U.S. and international law enforcement.

Along with refunding consumers, Western Union agrees to implement a comprehensive anti-fraud program where they will monitor and train agents and front line associates to detect fraud and protect consumers. They will not be allowed to transmit any money transfer that they know is a fraud and they will block transfers to anyone who has a fraud report. Western Union’s new anti-fraud program will make it easier to report fraud. Clear warnings will be provided to consumers sending money and refunds will be provided to consumers if the company doesn’t comply with their own anti-fraud process.

Things to Know When Sending Money

Sending money to family and friends or to cover a transaction can be fast and easy. Unfortunately, crooks take advantage of the convenience. Knowing how to detect a scam or fraudulent request can be fundamental in stopping fraud. Here are some tips to keep in mind:

  • Never send money, personal, or financial information to anyone that you have never met or that you have not vetted thoroughly.
  • It is illegal for telemarketers to ask you to pay for anything by wire transfer.
  • Avoid anyone that only accepts money transfers as the only form of payment.
  • Watch out for overpayment and fake check scams.

For more information, visit our resource guide on Money Transfer Services. Keep up-to-date on trending consumer news, scam watch warnings, and other articles by following us on Facebook and Twitter.

About Business Consumer Alliance

Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.

Tags: western union, federal trade commission, refunds, settlement

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