![]() The order also prohibits the company from transmitting a money transfer it knows – or reasonably should know – is fraud-induced. 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. 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. 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.Īmong 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. Secret Service and authorities in Canada, Japan, the U.K., Spain, and elsewhere, the FTC says it was business as usual for Western Union. Others were charged with setting up their own scams.īut 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. Some were prosecuted for being in cahoots with con artists. and Canada for crimes like mail fraud, wire fraud, or money laundering, with more than 100 arrested by law enforcement agencies in other countries. ![]() Thirty-nine Western Union agents have been charged in the U.S. Sky-high consumer complaint rates were just the start. ![]() And those are stats based on Western Union’s own documents. 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. You’ll want to read the complaint for details, but here’s just one example. Of Western Union’s total network of 515,000 agents, the FTC says a small number account for the vast majority of consumer complaints. 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. Fraudulent lotteries accounted for another 75,543 complaints, totaling $86 million in losses. According to the lawsuit, the company’s own in-house data documented that.įor example, between 20, Western Union received 146,909 complaints about bogus online purchases, totaling at least $187 million in losses. 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. 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. 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. “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. ![]() About the FTC Show/hide About the FTC menu items.News and Events Show/hide News and Events menu items.Advice and Guidance Show/hide Advice and Guidance menu items. ![]() Competition and Consumer Protection Guidance Documents.Enforcement Show/hide Enforcement menu items. ![]()
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