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January 31, 2017

Western Union to Enhance Anti-Wire Fraud Program and Pay $5 Million through 49-State Consumer Fraud Agreement

Western Union wire transfers played significant role in worldwide fraudulent schemes that prompted complaints in Iowa and across the country

DES MOINES – Colorado-based The Western Union Company, the world’s largest money service company, will implement a comprehensive anti-fraud program and pay $5 million to 49 states and the District of Columbia, including nearly $54,000 to Iowa, as part of a multistate consumer fraud settlement.

The agreement follows a broad investigation into consumer complaints in Iowa and nationwide regarding Western Union wire transfers connected to global fraudulent schemes. The company lists more than a half-million agent locations in more than 200 countries.

“Unfortunately, for many years, wire transfers through Western Union have helped facilitate and finance countless scams and criminals across the world at the expense of our consumers,” Attorney General Tom Miller said. “Through this settlement, we’re demanding that Western Union do more to protect people. We expect the company to beef up its efforts to detect wire fraud and help choke off funding through Western Union wire transfers.”

Related $568 Million Federal Criminal Settlement
In a related settlement of a federal criminal case announced January 19, Western Union forfeited $586 million to the U.S. Department of Justice and Federal Trade Commission, admitting to willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud. As part of that settlement, the Justice Department will oversee refunds to victims of fraudulent Western Union wire transfers. Consumers who believe they were victims of fraud facilitated by Western Union can seek payment through the DOJ’s Money Laundering and Asset Recovery Section at www.justice.gov/criminal-mlars/remission.

“Western Union wire transfers have been used in about every fraudulent scheme you could think of, from lottery scams, to work-at-home scams, to romance scams,” Miller said. “What all these schemes have in common is that the victim typically wires money, which is like sending cash that scammers can pick up anywhere in the world. The scammer walks away with the money and often leaves behind no viable trail for law enforcement to pursue.”

Multistate Agreement Requires Anti-Fraud Program
The settlement requires Western Union to develop and implement a comprehensive anti-fraud program. The program must help detect and prevent incidents where consumers who have been the victims of fraud use Western Union to wire money to scam artists, including:

  • Anti-fraud warnings on “send forms” that consumers use to wire money
  • Mandatory training and education for company agents about fraud-induced wire transfers
  • Heightened anti-fraud procedures when warranted by circumstances such as increased fraud complaints
  • Due diligence checks on Western Union agents who process money transfers
  • Monitoring of Western Union agent activity related to prevention of fraud-induced money transfers
  • Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures

2005 Western Union Multistate Settlement over Similar Claims
In 2005, attorneys general in 47 states, including Iowa, and the District of Columbia, reached an $8.1 million settlement with Western Union over similar claims that Western Union wire transfers were enabling scammers to collect money from victims.

2016 Multistate MoneyGram Settlement
In early 2016, attorneys general in 49 states, including Iowa, and the District of Columbia, reached a $13 million settlement with Dallas-based MoneyGram Payment Systems Inc. requiring the company to improve its efforts to combat money transfer fraud and pay restitution to some consumers.

“Consumers who are acting only on a phone call or email with someone they have never seen in person should be extremely cautious about wiring money,” Miller said. “Unfortunately, victims of these wire scams send money multiple times before realizing they’ve been duped.”

Consumer Tips for Wire Transfers

  • In these types of scams, scammers use the phone to seek immediate payment through money transfer services (such as Western Union or MoneyGram) and also prepaid debit cards (such as a Green Dot card).
  • Beware of calls urging you to wire money for an emergency involving a family member or friend. Scammers want you to act immediately, which is why it is so important to independently verify the circumstances.
  • If someone claims the only acceptable form of payment is a money transfer, that’s a red flag.
  • If you receive a check and are asked to wire a portion of the funds, it’s a scam.
  • If someone claims you won a lottery or contest but must first wire any type of payment, it is not legitimate.
  • If you think you’ve been victimized by a money transfer scam, contact the Federal Trade Commission (FTC) at www.ftc.gov or call 877-382-4357.
  • If you have questions or would like to report the scam to the Attorney General’s Consumer Protection Division, contact us:

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