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Nov 17

Fund Targets Victims Scammed Via Western Union

If you, a friend or loved one lost money in a scam involving Western Union, some or all of those funds may be recoverable thanks to a more than half-billion dollar program set up by the U.S. Federal Trade Commission.

In January 2017, Englewood, Colo.-based Western Union settled a case with the FTC and the Department of Justice wherein it admitted to multiple criminal violations, including willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud. As part of the settlement, the global money transfer business agreed to forfeit $586 million.

Last week, the FTC announced that individuals who lost money to scammers who told them to pay via Western Union’s money transfer system between January 1, 2004 and January 19, 2017 can now file a claim to get their money back by going to FTC.gov/WU before February 12, 2018.

Scammers tend to rely on money transfer businesses like Western Union and MoneyGram because once the money is sent and picked up by the recipient the transaction is generally irreversible. Such scams include transfers made for fraudulent lottery and prizesfamily emergenciesadvance-fee loans, and online dating, among others.

Affected consumers can visit FTC.gov/WU to file claims, learn more, or get updates on the claims process, which could take up to a year. The graphic below seeks to aid victims in filing claims.

The FTC says some people who have already reported their losses to Western Union, the FTC, or another government agency will receive a form in the mail from the claims administrator, Gilardi & Co., which has been hired by the DOJ to return victims’ money as part of the settlement. The form will have a Claim ID and a PIN number to use when filing a claim online via FTC.gov/WU.

The agency emphasized that filing a claim is free, so consumers should not pay anyone to file a claim on their behalf. “No one associated with the claims process will call to ask for consumers’ bank account or credit card number,” the FTC advised.

This isn’t the first time a major money transfer business admitted to criminally facilitating wire fraud. In November 2012, MoneyGram International agreed to pay a $100 million fine and admit to criminally aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program.

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43 comments

  1. This is ridiculous. People send money to someone they don’t know in a foreign country, but Western Union is accountable for it? Just wow.

    If you decide to send someone cash in an envelope, it would be the exactly same thing. Would the postal service be accountable?

    Western Union is similar to cash, so no, it is not reversible. I would only be ok with this if those transactions were done from a bank account or some other system that was not authorized/approved by the user. But if those persons physicially went to Western Union, handed out their ID and filled and sign a form they are the only ones responsible for sending money out to a scammer.

    • If you follow the link it is clear Western Union knew this was going on, in particular in the foreign countries where the scam payments were being sent, but did nothing to stop it or cut off Western Union agents who were knowingly participating in the scams overseas:

      “Knowing that its agents were involved in fraudulent schemes – and knowing that it had a legal obligation to detect and report this criminal conduct to the authorities – Western Union failed to act, leading to massive victim losses,” said Acting Assistant Attorney General Blanco.

    • You are wrong. For example, when I send cash in an envelope, I don’t need to provide ID or any documentation proving my identity.

      So clearly, since Western Union was collecting such information, there was an implicit guarantee that the person on the other end had their identity validated. Which means the person receiving the money is no longer a “stranger”.

    • “…willfully failing to maintain an effective anti-money laundering program and aiding and abetting wire fraud”, which is a crime.

    • I have to disagree with you. The key questions are did Western Union know what was going on and did they take reasonable steps to warn the consumers and/or prevent it? The answer to the first part is yes and to the second part is no.

      Intentionally turning a blind eye to criminal activities because those crimes profit you should be a crime. It may be buyer beware, but it’s not every man for himself.

      I hope the Feds apply the same logic and get after the telecoms for refusing to block known scam callers and illegal robo-callers on consumer request.

    • Having dealt with multiple fraud/scam claims against Western Union in my professional capacity over several years, I can assure you that they can be accountable.

      They have significantly tightened up their controls and procedures, but used to accept transactions and transaction details that would fail any common sense test – and used to double-down when facing recovery action, virtually feigning unawareness of their attractiveness as a fraud/laundering channel.

      Sure, they weren’t the ones doing the scamming. And we all live and learn a bit when it comes to transaction security. But they were plenty aware of it, and did far too little about it for far too long.

    • WU should have a clue of repetitive behavior of some transfers, considering that the victim will call WU and file a claim. There’s mail fraud schemes, and by phone and internet too. Illegal telemarketing to Seniors; which is investigated by US Postal Inspector Service and the District Attorney’s Office.

  2. A fool and his/her money are soon parted. Except for today when fools are reimbursed after their stupidity. Not saying the scammers are right, but what specific brand of moron hands money over via a non retrievable, zero recourse method to a complete stranger? Especially in this day and age where the warnings are everywhere. There is no hope for the human species. Sigh… How much taxpayer money was spent on the lawsuit the FTC brought? Did that get paid back first?

    • A lot of the scams go like this:

      Alice gets her Facebook login information stolen. Alice’s best friend/romantic interest Bob gets a message on his phone from “Alice” with a sob story about being stuck in an airport in Montreal or something, and someone stole her purse, she has no money and no way to get home, can he PLEASE send her a moneygram, she’ll pay him back as soon as she gets back to town!

      A lot of people *think* they’re sending money to someone they know. It’s not all “sure complete stranger, I’ll send you money to claim the lottery prize I never entered for in the first place”, although I’m sure there are a couple of those too.

      • Yep. This is a very common scheme that targets mostly the elderly. The scammers will call in the middle of the night and pretend to be a grandson or granddaughter stuck in a foreign country and having just been robbed. The grandma, groggy from being woken up and in a harried state from the emergency call, may overlook certain warning signs, like the person on the other end doesn’t sound like their grandson or granddaughter. Tons of people are taken in by this.

        • I would think that a good defense against this would be to get a confirmation, out of band fashion, such as a phone call to authenticate the requestor. Of course they could respond that they’re in a place where they weren’t able charge their cell phones.

    • I agree with you somewhat, however it’s important to note that what may now be considered common knowledge was not always so. This settlement applies to activity dating back to 2004.

    • The kinda “moron” who is an elderly relative, and gets a text message saying “Remember me, your nephew? I’m stuck in Africa in jail, I was on a trip overseas. I need $2000 to make bail, they’ve confiscated my passport so I can’t get help from anyone else”

      70 year old Grandma doesn’t know any difference and can’t contact her nephew the normal way (phone was stolen perhaps).

      This is just one way people get scammed by this.

      There’s also the tax fraud, where you get calls about getting thrown in jail unless you pay up to the IRS right now… by western union. Yeah it’s a scam, but targeting people who don’t know otherwise, sometimes it gets them.

  3. The sad thing is that PayPal is not held to the same standard. A fraudster perpetrated a fraud with a PayPal account on what turned out to be a false promise and potentially a counterfeit good if it was ever delivered. Then the fraudster tried to convince the victim that the instant transfer was not received and needed a “code” to validate it. This ended up being an account takeover attempt. Then the fraudster still tried to use the victims account to make an unauthorized purchase. All of this was reported to PayPal. Their response was simply that the instant transfer could not be refunded along with lots of legal language on the fact that the transfer was authorized (as is with all of the transfers being refunded above). At no time was a refund offered, at no time was the fraudsters account put on hold, at no time was the fraudster held accountable by PayPal for the takeover attempt, nor was the fraudsters account shutdown. A complaint was also filed with the CFPB with no action taken. The PayPal scenario is much more egregious, yet PayPal is not being held to even similar standards.

  4. LOL!

    How much was paid to Leftist organizations on the down-low as part of that “settlement agreement”?

    Obozo and his cronies made a mint that way.

    The firms fined see it as a cost of doing business and pass it on to the consumer while the bimbo cheerleaders in the agenda-driven media praise the Emperor’s New Clothes, leading the moron public by the nose.

    Morons.

  5. Claim ID and a PIN number, huh? lol. Can’t wait for the follow up article explaining that it’s easy to claim someone else’s claim.

  6. Interesting enough, the U.S. Postal System is aware of scams that are perpetuated upon the elderly. If they see an elderly person stuffing money into an envelope and then bringing it to the counter to be posted and mailed, they will sometimes notify the postal inspector or police. Unfortunately, such notifications are not required. One postal counter worker had actually seen a man sending cash this way for weeks, felt certain that he was somehow being scammed, and asked a lady costumer to try to intervene. She did and the police were eventually contacted. They convinced the elderly man to stop.

    • On the subject of this comment (though it’s a bit wide of the original story):

      Twice, I’ve received letters at a US address apparently sent from Another Country. The letters were obviously (to my eye) boiler-plate scams, purporting to be from someone on staff at a bank. Unclaimed funds were available from the estate of a relative previously unknown to me. If I’d merely contact the sender at a gmail address, we’d split the swag.

      As it happens, I have family in the Other Country who made inquiry with That Country’s postal service. That Country’s postal service was very interested, but said the complaint had to originate with a US Postal Service postal inspector. No human at my local post office fit that description. A toll-free fone number offered no joy other than directing me to a website. And the website offered no relevant option other than filing a complaint online to which there might be a follow-up. I did file an on-line complaint; perhaps the follow-up was lost in the mail.

      Historically, the US Postal Service had a reputation for aggressively pursuing postal fraud which is one reason there’s relatively little of it. I’m clueless whether that reputation is still merited.

  7. My wife and I are in our late 70s and we are fortunate enough to have a lot of life experience and retained most of our mental faculties. Most of the people commenting here are in a similar experience and knowledge situation; however, there is large segment of the population that are on the opposite end of the spectrum.

    They do not have the life experience or education or they have lost some of their ability to reason with age. Perhaps two years ago they were living in a society that was technologically crude.

    People who are scammed by the “this is you nephew and I’m in jail in Mexico” story are reacting emotionally to save their nephew, unlike the “I’m a princess with a secret bank account” story where they are trying to make an illegal profit.

    Twenty-somethings with a college education and a lifetime on a cellphone should be a lot less judgmental of old people who are often trying to deal with a world they do not understand and/or have lost a few steps in their reasoning process.

    God willing you’ll all get old someday and have the same “problems” with the technology of tomorrow (p.s. most of you young folks don’t know how to tune a carburetor because you’ve never even seen one).

    • Carburetor? Most don’t even know how to change brake pads, and those are on the cars they drive today.

    • AMEN !!

    • Young Whipper Snapper

      omg ur too old to be on interwebs

    • “Common Knowledge” has it that *only* old people get scammed. Surprise! Young people are *also* vulnerable. Maybe even more so, because they often have an implicit trust in things digital that us old folks usually do NOT share.

      Try plugging “young people get scammed too” into your favorite search engine.

      Here is just one example:
      “Study Finds Young People May Be Easy Scam Victims – Millennials don’t take enough precautions”
      _Consumer Reports_
      August 05, 2016
      https://www.consumerreports.org/consumer-protection/young-people-easier-scam-victims/

      • There’s a disturbing trend among people under a certain age to not understand that passwords are meant to be secret. As in they share passwords with one another. Boyfriends must share passwords with girlfriends, girlfriends must share passwords with boyfriends, friends must share passwords with each other, on and on, all digitally, all posted online if you manage to worm your way into their social media circle or (gasp) break into the company that’s hosting the data.

        Poor opsec doesn’t even being to describe this. Couple this with the ever-present problem of username/password reuse and you’ve got a massive group of people raised to be perpetual ID theft victims.

  8. Oh, the irony. The scammers have used the “reimbursement fund set up for people scammed” scam before.

  9. Kinda Old man@55

    Two thumbs up to Old_Man & EstherD!!

  10. I was also scammed via money gram, believing his damn sob story is there any payback for money gram, receipts and everything! Wasn’t thru dating sight, it was Facebook, I’m not on dating sights, please help if you can police report, receipts, everything I have

  11. Unfortunately my Mom was scammed after my father died. She was depressed, lonely, and developing a cognitive disorder with dementia. There are so many seniors who become victims for all sorts of reasons. Who has been there to help them navigate all these tools? I’ve seen incredibly vigilant people open up that weird looking email from a friend and then give themselves a virus on their device. Sad we’ve got people here blaming the victims. I mean what idiot Western Union employee is taking thousands of my Mom’s dollars at a Western Union store in the all-white suburbs and sending it to a Paul Ngirie in Abuja, Nigeria multiple times over a month and doesn’t call the cops or question my Mom? How about refusing to send it? It’s not like my Mom was smart enough to go to different Western Union stores every time.

    • Why would others intervene when her daughter apparently thought she didn’t need constant supervision?

    • Banks cannot (legally or ethically) impose age, health, disability, or competency restrictions on transactions seemingly initiated by account-holders.

      Imagine the outrage that would occur if a bank teller or MoneyGram clerk told a customer to leave, on account of appearing old or unsteady. Imagine the outrage if customers were told “You are making a stupid mistake.”

      It’s just a reality that adults will eventually age and have to hand over responsibility of their finances to family or someone they hire. They should plan for that. AND, adult offspring should be prepared to step in, because that’s where the responsibility lies.

  12. My dad fell for a fake Amazon customer service scam: miscreants got their phone number to appear in Google Results as Amazon Customer Service. My dad called; the scammers solved the Kindle problem he was calling about, then got enough info to withdraw funds from his credit card account. Dad’s bank called him the next day with the news he’d been scammed.

  13. hey I have gotten scammed email from a friends account that he needed help stuck in an airport missed his flight and lost his luggage & wallet Said he borrowed a phone to send me a message. Here his aol account was hacked and everyone got the same email.

  14. I see it mentions MoneyGram as well. Did their 100 million fine also go to a fund set up for victims? Who profited off that deal?
    And for the record not all victims are idiots. My 16 year old daughter was scammed off the website Care.com, set up for babysitting and “nannying”. I wouldn’t expect a child to know the dangers of the sick world we live in yet.

  15. I also wonder if banks can be held accountable. My elderly father would go in week after week to a large bank (rhymes with Smells Fartgo) & he would send $10,000 nearly weekly to these idiots who were (….wait for it…) trying to get a gold mine up & running. The said gold mine was in Mexico. They would call him almost daily with ‘updates’ on how things were going, an equipment update, & occasionally would even have him talk to the purported ‘foreman’ down @ the mine. After I knew what was going on & saw what had happened, I was able to report this to our local authorities (financial crimes unit) & they told me this type of thing happens so much of the time – especially to elderly people. A lot of them have lived in a time when business was done on a handshake & people took each other @ their word. These scammers have elaborate networks set up, have made quite a system of doing this, & are highly adept at getting people to ‘invest’ or ‘plan’ for a windfall of money. They remember personal details about their mark, & will ask how the mark’s family is, their health, see how grandkids are doing, & interject themselves into the life of their mark. Often times these scammers are the only person (or people) an elderly person will talk to in a timeframe of several days to a week. It is sad – the frequency that this happens.

    • Why should a bank be held responsible for processing transactions for a person whose family hadn’t stripped of his financial authority?

      Families and their communities, not banks, need to accept responsibility for their elders.

      It’s not appropriate for banks to be setting age, health, or competency screenings for clients.

    • It’s the responsibility of adults to plan for the inevitable day when they cannot manage their own finances safely. Failing that, their family, friends, and community should look out for them.

      Banks cannot (legally or ethically) impose age, health, disability, or competency restrictions on transactions seemingly initiated by account-holders.

  16. They were knowingly facilitating a crime. Which is also a crime.

  17. Since the elderly and the naive tend to be the ones who fall for these scams, it is in the best interest of Western Union, Money Gram and other money transfer services to invest in research that will lead to their systems guaranteeing secure transfer of money for their most vulnerable customers. These companies having being in existence for a long time need to at least analyze the reports they have ever received with the goal of getting a solution(s).

  18. Dear Brian,

    I’d be interested to know if you have any more details on the alleged loss of 15k card details from Western Union in September.

    http://abcnews.go.com/Technology/story?id=119471&page=1

    Thanks

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