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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.
In Obama America WU supported the Nigerian scammers
This may do the trick
Religion: The greatest weapon of mass destruction of all time
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online casinos used to use western union as well!
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.
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.
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.
I've discovered that quite a few folks in the US think that an offer to pay them via bank transfer is a sure indicator that I'm trying to scam them, or seeking to hack into their bank account.
Not to mention all the places in the US that *require* payment via cheque or other paper instrument. WTF? Is it still, like, 1975 there? Seriously--I've not written a cheque in close to 20 years, but on a recent visit there, I was obliged to buy some money orders because that was the only alternative they'd accept other than me coming in personally with a big wad of cash!
Il n'y a pas de Planet B.
I've never understood it. Why would someone use Western Union to transfer money instead of a normal bank transfer?
I think the legitimate use for it is for emergencies. If you break down 1000 miles from home and need money to get home, you call your dad collect and have them send you money via western union. My dad was a truck driver and they always used comcheck which is a similar system where money could be transferred instantly. The other semi legitimate use is to send money more easily across international lines. Western union is kindof like hawala. The idea is that you can give person A at one location $100 and person A can call person B at another location to instantly release the money. There is no need to wait to have the money verified, physically transferred, etc... because person A trusts person B. Most of their regular customers seem to be this later category. It seems to be a lot of illegals and foreigners sending money abroad.
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.
While that all probably made lots of sense decades ago when there were no international bank transfers, nowadays it sounds quite complicated and involved compared to just entering a transaction in an online banking system, which is usually free and if not, probably cheaper than paying a third party such as Western Union.
586 million dollar fine, versus how much Western Union made, turning a blind eye to this money laundering.
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!
I've seen lines of (apparently) Mexican men lined up at Western Union counters in the local supermarket. I assume it's their preferred method for sending money home.
You are making the assumption that the recipient has internet access, a bank account and a reliable place to withdraw the money. The whole advantage of Western Union is that it becomes instant cash on the other side so the recipient doesn't need anything other than the ability to show up in person at some office with the required information. I have rarely seen Western Union used between two countries with reliable banking systems.
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.
The big business doing this now is Wal-Mart and their "Woodforest Bank" branches inside the store - deposit in one town, withdraw in another. Fuel is still mostly bought, and loads are usually still paid for with cash, especially among independents, but most towns have a Wal-mart and drivers are rarely going down the road with $3-4K in the cab anymore.
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.
There's an app (and website) called "Square Cash" (different than the Square credit-card readers). If you enter a debit card, people can send you money, and you can send it instantly to your bank. I guess it works like a reverse-charge (like when you return an item). But it's instant. I haven't seen this offered elsewhere though.
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.
Bank transfers have a few issues.
1. While in-country transfers are usually free or cheap and easy to perform international transfers are often expensive and awkward.
2. At least the US and the UK have direct debit systems which work based on bank account numbers and have little security. This makes people reluctant to give out their bank account numbers.
3. Poor people often don't have bank accounts. This goes double for poor people living in poor countries or poor people living as illegal immigrants in rich countries.
4. Bank transfers can be slow. This is especially true for international transfers.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
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".
Close. Through at least 1999, WU still operated on a mainframe that had been in service since 1974. There were scores of filing cabinets full of microfiche bundled with rubber bands.
For a company based on what was once high tech, they've been deathly afraid of it for a long, long time.
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?
> 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.