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Western Union Pays $586M Fine Over Wire Fraud Charges (reuters.com)
The head of the FTC says Western Union "facilitated scammers and rip-offs," while the company "looked the other way." An anonymous reader quotes Reuters:
The world's biggest money-transfer company agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud, U.S. authorities said on Thursday. Western Union, which has over half a million locations in more than 200 countries, admitted "to aiding and abetting wire fraud" by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection, the U.S. Department of Justice and the Federal Trade Commission said in statements...
Fraudsters offering fake prizes and job opportunities swindled tens of thousands of U.S. consumers, giving Western Union agents a cut in return for processing the payments, authorities said. Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents, authorities said... Between 2004 and 2015 Western Union collected 550,928 complaints about fraud, with 80 percent of them coming from the United States where it has some 50,000 locations, the government complaint said. The average consumer complaint was for $1,148, the government said.
Reuters seemed to suggest that nearly one out of every thousand transactions was fraudulent, reporting that Western Union "said consumer fraud accounts for less than one-tenth of 1 percent of consumer-to-consumer transactions."
Fraudsters offering fake prizes and job opportunities swindled tens of thousands of U.S. consumers, giving Western Union agents a cut in return for processing the payments, authorities said. Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents, authorities said... Between 2004 and 2015 Western Union collected 550,928 complaints about fraud, with 80 percent of them coming from the United States where it has some 50,000 locations, the government complaint said. The average consumer complaint was for $1,148, the government said.
Reuters seemed to suggest that nearly one out of every thousand transactions was fraudulent, reporting that Western Union "said consumer fraud accounts for less than one-tenth of 1 percent of consumer-to-consumer transactions."
Western Union has turned a blind eye to criminals using their services for fraud for decades. Why did this take so long?
Pay a fine, get off free?
Hope they follow-up in parallel with a criminal case.
this should less than 6 months of scam
Whoever falls for a scam involving sending money via Western Union is a retard. Educating people should be preferred to fining Western Union.
In Obama America WU supported the Nigerian scammers
This may do the trick
Religion: The greatest weapon of mass destruction of all time
Never go back to black.
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online casinos used to use western union as well!
No fraud here. Move along....
Surly they have that backwards. Only 1 in 10000 was legitimate. Seriously, who here has ever used western union?
Matter of fact, back during the GWB administration, my local supermarket had a WU advertising poster offering a discount rate on money transfers to Nigeria. Now we don't have any unusual concentration of Nigerian immigrants here -- most of the money transfers go to Mexico -- so the only visible motivation for this offer was to cash in on the Nigerian scam.
And knowing the intelligence level of the target market, the poster added that WU would give the customer less than the going currency exchange rate and keep the difference.
The poster came down in 2008.
Until it becomes unprofitable it will continue. They made BILLIONS on this. To them it's just cost of business.
1. Does the $586 Million cover the losses of the individuals that were scammed?
2. Will they get it or is this a big, fat payday for the Government? (Hint: usually is)
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
I've never understood it. Why would someone use Western Union to transfer money instead of a normal bank transfer?
The agent in my local town stopped my dad from sending $1500 to a "friend in need" that contacted him by text message. I told him it was a scam before he tried to transfer. He was upset that they didn't let him send money. I told him to CALL his friend, and that was the last I heard about it.
My mother-in-law got a phone call saying that she owed back taxes and would be arrested if she didn't pay. Now, this is a woman who has no income other than her pension. She went to a Western Union and tried to transfer money to pay the fraudster, and the agent refused to let her send the money. She was furious, and called my wife, who fortunately told her mom that she is an idiot who should thank the agent.
If this is the kind of fraud they are talking about, I sympathize with Western Union. How exactly do they determine what is fraudulent, and what should they do?
The ftc.gov filing says:
Western Union’s failure to comply with anti-money laundering laws provided fraudsters and other criminals with a means to transfer criminal proceeds and victimize innocent people
Can anyone post what those "anti-money laundering laws" say? I am curious how the average Western Union employee would really know if something is fraud, and deal with it.
You're so stupid it's disgusting.
Government to WU: We've been watching you aid criminals all over the world, for years, and we didn't say anything, but enough is enough!
We want a cut.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Compared to every other first-world country, the US is ass-backwards when it comes to banking and health care. Western Union itself is an entrenched buggy-whip maker that isn't necessary anywhere in the world except for the US, as unlike every other first-world country you CANNOT do a general bank-transfer to another person/company in the US - the exception being that some banks (like Chase) allow for bank transfers to other Chase customers.
The poster came down in 2008.
Obama took office in 2009.
586 million dollar fine, versus how much Western Union made, turning a blind eye to this money laundering.
Nigerians being dishonest, and being behind loads of e-mail scams? Never! That's 'racist'!
There, fixed that for ya.
Now that they've been fined by gov't, I wonder if we're likely to see a class-action follow by all the people that've been victims of WU's pandering to fraudsters? One doesn't exclude the other, after all (actually, I'd imagine a regulatory fine might be useful to a lawyer in a class-action).
Wow. I was curious to see if I could find a copy of this poster so did a quick search.
I couldn't find the poster searching for "western union nigeria poster", but this link - titled "Send money to Nigeria" - is totally lacking any kind of warning. Maybe Nigerian spam has petered out a bit recently but it still seems like there should be at least a warning in the footnotes!
You're so stupid it's disgusting.
I agree. Doesn't parent know that politicians, big-business people, and mafioso all exchange suitcases full of cash? They don't use western union. They have some bald guy handcuff it to his wrist and carry it over.
Did you actually ever check whether or not they completed the transactions? In most WU US offices, they attempt to figure out scams and warn about them. The agents won't gain anything if you fall for a scam so they generally will do everything they can to not take the business. On the Nigerian side, the agents would probably just insist on a cut. And WU should notice that certain agents accept all transactions in Nigeria while others routinely reject them. They will know because it's unusual for somebody to receive multiple high-dollar transfers in a short period of time and should flag the transactions.
Which is probably why he said "during the GWB administration", given that it was still in office in 2008.
Though, honestly, I doubt either administration had anything to do with any of this stuff. This is corporate fraud, plain and simple, and that happens under every administration.
as a tangent to that, I noticed that the local grocery store near me has a sign to advise people that people asking for gift cards to pay bail, fines, or taxes is probably a scam.
Which executive knew about which charge being fraudulent? If you can prove that a specific person committed a specific crime at a specific time, you can charge them.
Otherwise, it's not too different from "some people on Reddit probably did $BAD_THING, so lock up all of the people on Reddit".
Having had to make a wire transfer to a relative living for a year in an African country (not Nigeria), I can say that they're checking fairly thoroughly recently. (e.g. after paying cash and showing ID, I had to call their 800 number and answer a bunch of questions - when I finally figured out what it was about and said "no, I'm not being scammed by someone on the internet" they let the transfer go through)
Isn't that the fucking FBI's job? To investigate all that shit, with their high-powered forensics and iPhone cracking, etc?
I mean, I can accept that nobody gets charged (in the same manner that a battered woman takes the next beating, because she's used to it), but at the same time the FTC announces a half-billion dollar fine for money laundering and we don't even HEAR about the ongoing FBI investigation into criminal culpability?
And spare me the "who committed what specific act" -- isn't the point of being an officer of a corporation accepting general liability for misbehavior?
Are you playing the "I'm a mouthbreathing retard" defense, or is that your default state?
Someone there is in charge of creating and/or continuing the policy that allowed this to happen for years (since it's been going on so long, it's entirely possible whoever started it is long dead). Willful ignorance by instructing employees to ignore Red Flag or KYC regulations should not fly, but sadly there's a long history of the courts saying "well golly gee, I guess we can't hold people with single digit IQs responsible!"
But hey, if you're a fan of government regulation, keep on keeping on. This is how we got nearly all of the regulations we've got so far: "hurr hurr nobody told me I had to check so I didn't durr" and then they sell children's cough syrup made with antifreeze, and now we have the FDA.
> Isn't that the fucking FBI's job? To investigate all that shit, with their high-powered forensics and iPhone cracking, etc?
Yes, job of the FBI (and really more state police) is to investigate and get evidence regarding people who committed crimes. That was done, and the people who committed criminal acts, for which there sufficient evidence, are facing criminal charges.
You've said that "senior executives" have committed crimes, and even specified what sentence they should receive. Is there any evidence that they committed any crime? I don't suppose you happen to even know so much as the names of the people you've already convicted? Your logic seems to be "if someone is at executive, they must have committed some crimes, and those crimes deserve a sentence of 20 years". Fortunately, our justice system doesn't work that way.
> isn't the point of being an officer of a corporation, accepting general liability for misbehavior?
Uhm, no ... Da fuck? No, the job of an officer of a corporation is not in fact to go to jail whenever any employee commits a crime. Not sure where you got that idea. Maybe because that *is* a significant part of the whole point of creating a corporation in the first place - you can fine the corporation, or sue the corporation, without having to identify which individual employees did what, who knew what, when, etc. If misdeeds were done in order to enhance corporate profits, you punish or recover from the corporation itself. That makes it much easier to sue or punish, when you can sue or punish the business rather than trying to prove that vice president Smith said this on this particular day, etc.
What we end up with when we protect stupid is a nanny state that is costly, inefficient, and dependent on violence for the purpose of social and political goals. The majority of the poor are poor explicitly because the government deprives individuals of about 50% of their income through a variety of means. Renters pay property taxes through their landlords. They pay vehicular registration taxes (high in some states), sales taxes, prepared food taxes, import taxes (indirectly), and various other forms of fees and taxes. Arrested? Pay a fine, court fees, and so on, often despite there being no victim. If we eliminated the police, schools, shrunk the military and pulled out of foreign wars/lands, and left people to cover there own security/schooling/etc we'd all be much better off financially. The poor might not be insured, but they'd at least be able to eat and have a place to live. Compared to how things are now where people end up forced onto health insurance they can't afford to pay (but is stolen from their paycheck) and end up on the street/starving and we call this a civilized society. I know because my partner was in this exact situation. And that "free" health insurance isn't free- and doesn't even work- when you are 40 miles from any doctor (despite being in a city at the heart of health care for the region) and have no means of transportation (and then being turned down because the doctor stopped taking it between the week you inquired and made the appointment and the actual appointment, and I'm shocked they didn't try to go after him for the bill for the appointment made).
How does one go about collecting an award? Or is this class action? Anyone know?