Western Union agrees to pay $586M after agents helped thieves process fraud payments


Consumers who think they were affected by fraud perpetrated by Western Union agents should visit the Department of Justice’s victim website to determine how to request and receive compensation.

Global money transfer service Western Union has agreed to pay the government $586 million as part of a settlement with the Department of Justice, the Federal Trade Commission and other government agencies for “willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud,” according to a DOJ press release Thursday.

Read more: Student loan giant cheater borrowers, new lawsuit says

Western Union knew of fraud, failed to act

Western Union’s “system facilitated scammers and rip-offs,” FTC Chairwoman Edith Ramirez said Thursday in a press release, which also stated that the business violated U.S. laws by processing “hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.”

Western Union knew of these infractions but failed to take “corrective action against Western Union agents involved in or facilitating fraud-related transactions,” according to the DOJ press release. The bulk of the misconduct occurred between 2004 and 2012, and involved 2,000 Western Union agents.

Claiming to be related to their victims, fraudsters contacted people and told them to send money via Western Union in return for prizes or job opportunities. Western Union agents were involved in these transactions, “often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds,” the FTC’s press release said.

As part of the settlement, Western Union must incorporate anti-fraud practices into its business model.

In a company press release Thursday, Western Union said it would “pay a total of $586 million to the federal government, which is to be used to reimburse consumers who were victims of fraud during the relevant period.”

Western Union wasn’t available for comment at the time of reporting.

Read more: How to spot a debt collection scam


Tips to avoid fraud

There are precautions you can take to avoid money transfer fraud:

  • Never wire money to people you don’t know. Scammers may pretend to be a family member or might say you won a lottery or sweepstakes. Don’t send them money.
  • Don’t send money if you’re feeling rushed or confused. If you’re being asked to send money immediately, first make sure that you know who the recipient is and why he or she is asking you for money.

Warning: This text message scam can steal your identity

More from NerdWallet:

  • Show Comments Hide Comments