Western Union has been helping people move money since 1871. But in the internet age, the wire-transfer giant has become known not just for providing financial services, but also for being the preferred financial service of Nigerian princes asking for your money by email.
And for every person who can see a money-laundering scam a mile away, there’s another person who falls for it. After all, good scammers are professionals.
Now, Western Union is in trouble. And it owes big money to its customers.
What Western Union Did to Owe $586 Million to Its Customers
In a global settlement with the Federal Trade Commission and the Department of Justice, Western Union will make amends with customers and shore up its anti-fraud practices.
The FTC reported in a blog post that between January 2004 and August 2015, the company received more than 550,000 complaints from people who had been scammed into completing a Western Union money transfer.
Western Union failed to act in the best interest of the customer by failing to flag transactions it suspected to be criminal, according to the FTC.
Western Union is in So Much Trouble
It gets worse: Internal reports indicated that Western Union’s own agents participated in fraud schemes that hurt customers.
“There were warnings from U.S. and international law enforcement about the fraud,” Bridget Small of the FTC explains in a blog post. “And yet, the money kept rolling on through.”
The consequences? Western Union will return $586 million through a process that will be announced later. (Monitor the FTC’s blog for more information.) According to the FTC, Western Union also agreed to:
- Block money transfers sent to any person who is the subject of a fraud report;
- Provide clear and conspicuous consumer fraud warnings on its paper and electronic money transfer forms;
- Increase the availability of websites and telephone numbers that enable consumers to file fraud complaints;
- Refund a fraudulently induced money transfer if the company failed to comply with its anti-fraud procedures in connection with that transaction.
Pretty long to-do list.
As it informed consumers about the settlement, the FTC’s blog gave a reminder that it’s illegal for telemarketers to ask for payment via Western Union.
“Scammers love using money transfer services because once you send the money, it’s gone forever,” Small wrote.
We’ll share more information about the settlement as it becomes available.
Your Turn: Has a scammer ever asked you to send money through Western Union?
Lisa Rowan is a writer and producer at The Penny Hoarder.
The post That Nigerian Prince was a Scammer. This $586 Million Settlement is Real appeared first on The Penny Hoarder.
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