Western Union has reached an agreement with the states, including Nebraska, to resolve a multistate investigation into the use of wire transfers to defraud consumers.
The complaints against Western Union, which has its headquarters in Colorado, involved sending money to third parties which operated schemes to defraud consumers.
Under the settlement, Western Union will develop a comprehensive anti-fraud program to prevent scam artists from using wire transfers.
The Nebraska Attorney General’s office reports the anti-fraud program will include the following elements:
- Anti-fraud warnings on send forms that consumers use to wire money;
- Mandatory and appropriate training and education for Western Union’s agents about fraud-induced wire transfers;
- Heightened anti-fraud procedures when warranted by circumstances such as increased fraud complaints;
- Due diligence checks on Western Union agents who process money transfers;
- Monitoring of Western Union agent activity related to prevention of fraud-induced money transfers; and
- Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures.
Western Union has agreed to pay $5 million to the states to offset costs and fees. Western Union also 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 Nebraska victims.
Western Union issued the following written statement:
“We share the goals of the attorneys general and are committed to protecting consumers and the integrity of our global money transfer network from abuse by bad actors. That’s why we have significantly enhanced our compliance program in recent years by adding more employees with law enforcement and regulatory expertise, strengthening our consumer education and agent training, bolstering our technology-driven controls and having our Chief Compliance Officer report directly to the Compliance Committee of the Board of Directors.
“Over the past five years, we have increased overall compliance funding by more than 200 percent and now spend approximately $200 million per year on compliance, with more than 20 percent of our workforce dedicated to compliance functions. The incidence of consumer fraud reports associated with Western Union money transfers has been extremely low – less than one-tenth of 1 percent of all consumer-to-consumer money transfer transactions during the past 10 years. Over the last five years, the dollar value of reported fraud in consumer-to-consumer transactions, compared with the total value of all such transactions, has dropped more than 60 percent.”
For more information about the federal settlement, click here.
