Blog Post  Western Union Settlement

Con artists routinely steal thousands of dollars, usually without ever needing to leave their homes. Their scams, whether they involve vacation home rentals or fake kidnappings, usually have one key component in common: they get their victims to send money through money wiring transfer companies.

Recently, one such company has been put under the spotlight for allegedly knowing about scammers exploiting their organization to commit fraud. According to the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ), Western Union knew scammers were using its system to commit fraud, and even had evidence that many of its own agents were committing fraud. Moreover, the company received more than 550,000 complaints about fraudulent money transfers, yet continued to operate as usual. Western Union agreed to a settlement with the FTC and DOJ to refund $586 million to users, and build a solid anti-fraud program.

The FTC and DOJ recently offered an update on the settlement. The DOJ will be responsible for handling the refund process. They estimate Western Union will finish paying the $586 million sometime this year. Once the DOJ has the full settlement amount, they’ll open up the process for people to make claims, a process known as “Petition for Remission.” The DOJ will need to verify all claims and all eligible claimants will get some money back. The total refund amount per person depends on the amount lost and the total number of claimants.

If you are a victim to a scam involving Western Union money transfers, the FTC suggests the following:

• Make sure you still have paperwork regarding any money transfers you made to scams. You may need these to file a claim.
• Scammers are also offering to help individuals get a Western Union refund in return for money. Neither the FTC or DOJ would ask for money, so don’t fall for this.
• Sign up for email updates about Western Union refunds

Scammers use money transfers because there is no way for you to get your money back. Consumers should exercise extreme caution when using a money wiring service and only send money to persons they know and trust. The Division of Banks regulates foreign money transmitters licensed in Massachusetts. In April of 2016, the Division issued an industry letter to CEOs of licensed foreign money transmitters to raise awareness about common scams and wire fraud targeting consumers. Currently, the Division does not have authority over domestic money transmission.

Consumers are encouraged to report possible complaints involving licensed foreign money transmitters to the Division using the Complaint form available at www.mass.gov/DOB.