Western Union Agrees to the Largest Financial Forfeiture by a Money Service Business

As a result of extensive, well-coordinated investigations and lawsuits, your BBB® has learned that the Federal Trade Commission (FTC), Justice Department, FBI, IRS, Consumer Financial Protection Bureau (CFPB), several U.S. Attorneys, the U.S. Postal Inspection Service (USPIS), the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HIS), and the Office of the Inspector General for the Board of Governors of the Federal Reserve System recently announced the Western Union settlement. The charges were extensive.

The FTC complaint says that Western Union “knew that massive fraud was afoot and had the ability to address it, but chose to look the other way, and continued to do so in the face of obvious evidence.” In addition to the FTC lawsuit, the Justice Department was also conducting a criminal investigation of Western Union for “failure to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act” (BSA) and for violating anti-fraud statutes. The Justice Department’s Criminal Division Acting Assistant Attorney General (AG) David Bitkower was quoted in the press release as saying, “Western Union is now paying the price for putting profits ahead of its own customers.”

According to an FTC blog the agencies investigating Western Union found that between 2004 and 2015, Western Union received

  • almost 150,000 complaints about bogus online purchases totaling at least $187 million in losses,
  • a little over 75,000 complaints about fraudulent lotteries totaling $86 million in losses,
  • almost 42,000 complaints about emergency scams totaling at least $73 million in losses.

The settlement in the FTC lawsuit also settled the Justice Department’s criminal investigation of Western Union. Under the terms of the settlement as stated in the FTC blog, Western Union must

  • forfeit $586 million (the “largest financial forfeiture by a money service business”)
  • put a comprehensive A-to-Z anti-fraud program in place
  • complete meaningful training and monitoring to protect consumers in the future
  • not transmit a money transfer it knows—or reasonably should know—is fraud-induced
  • block money transfers to anyone who is the subject of a fraud report
  • provide clear and conspicuous warnings to consumers
  • make it easier for consumers to report fraud
  • refund a fraudulently-induced money transfer if the company failed to comply with its anti-fraud procedures

People who believe they were victims of a fraud-related Western Union transaction should visit the Department of Justice’s victim website at https://www.justice.gov/criminal-afmls/remission for instructions on how to request compensation. A claims administrator to manage victim remission process has not been hired yet, but once a company has been hired, a separate website will be set up just for the Western Union matter. Consumers should keep checking the remission website shown above for more details.

For more information you can trust, visit bbb.org/evansville.

About Jackie 240 Articles
Jackie is the Operations and Education Foundation Assistant with the BBB. She assists consumers with business inquiries, and does presentations to senior groups and high school students. She is a regular contributor to the blog.

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