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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."
It's a large fine, but my question is why weren't the senior executives charged under the RICO laws and given the 20 year jail sentences and $100k per incident personal fines?
Why is it that if you're running under a corporate charter that you're excluded from being defined as running an ongoing criminal enterprise?
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.
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.