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NYS and Western Union Develop Stronger Anti-Fraud Program

 


NEW YORK- Attorney General Eric Schneiderman today announced a joint settlement with Colorado-based The Western Union Company, resolving a multistate investigation, which focused on complaints of consumers who used Western Union’s wire transfer service to send money to third parties involved in schemes to defraud consumers. In addition to New York, all 49 states and the District of Columbia participated in this settlement. 

“Criminal scam artists are adept at creating all kinds of schemes to convince consumers to wire them money,” said NYS Attorney General Schneiderman. “I encourage New Yorkers be extra vigilant when responding to advertisements, solicitations, and phone calls, which are too often peddled by fraudsters looking to scam unsuspecting individuals out of their hard-earned money. I am pleased that today’s settlement with Western Union will institute extra protections to combat fraud moving forward.” 

The settlement requires Western Union to develop and put into action a comprehensive anti-fraud program designed to help detect and prevent incidents where consumers who have been the victims of fraud use Western Union to wire money to scam artists.

That anti-fraud program, which Western Union has agreed to continuously evaluate and update as warranted, includes the following elements:

Consumer anti-fraud warnings on the front page of money transfer forms;

Mandatory training and education for Western Union’s agents about fraud-induced wire transfers;

Increased scrutiny of agent locations whose fraud complaints exceed certain thresholds;

Background checks on prospective Western Union agents who process money transfers;

Monitoring of Western Union agent activity to prevent fraud-induced money transfers;

Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures.

Western Union also has agreed to pay a total of $5 million to the states for the states’ costs and fees. In addition to this settlement with the states, Western Union also settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice, as announced on January 19, 2017.  As part of those related settlements, Western Union has agreed to pay $586M to a fund that the Department of Justice will administer to provide refunds to victims of fraud induced wire transfers nationwide, including New York victims.  In February 2016, New York, along with 48 other states and the District of Columbia, entered into a similar settlement with MoneyGram. 

Consumers should be aware of common scams, including:

Lottery and contest scams in which consumers are told they have won a large sum of money, but must first wire money to pay required taxes or fees before receiving their winnings;

Grandparent scams in which a consumer is led to believe his or her loved one is in immediate danger and needs money right away;

Romance scams in which someone poses as a love interest and then soon begins asking consumers to send money for various reasons, such as medical emergencies, car accidents, muggings, or emergency travel;

Tax scams, including when the caller poses as an official from a government agency, such as the Internal Revenue Service, oftentimes using an official looking phone number. The scammer will claim that a past due tax balance is owed, and tell the victim that unless the debt is paid immediately, a team of officers will come to the victim’s home that day to arrest the victim. New Yorkers should remember the IRS and legitimate government agencies never demand payment by phone;

Telemarketing scams involving solicitations such as advance fee loans, work-at-home opportunities, magazine sales, credit card offers, business opportunities or travel deals.

Consumers who receive these types of solicitations from strangers should toss those letters in the trash, delete the e-mail, or hang up the phone. And consumers who meet someone online should be cautious about wiring money, particularly if a meeting in person has never taken place. 

More information about this settlement is available here: https://www.justice.gov/criminal-mlars/remission.

 

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