#1 Lawyer Network
WASHINGTON Western Union Co, the world’s
biggest money-transfer company, agreed to pay $586 million and
admitted to turning a blind eye as criminals used its service
for money laundering and fraud, U.S. authorities said on
Western Union, which has over half a million locations in
more than 200 countries, admitted “to aiding and abetting wire
fraud” by allowing scammers to process transactions, even when
the company realized its agents were helping scammers avoid
detection, the U.S. Department of Justice and the Federal Trade
Commission said in statements.
With the help of Western Union agents, Chinese immigrants
used the service to send hundreds of millions of dollars to pay
human smugglers, wiring the money in smaller increments to avoid
federal reporting requirements, U.S. authorities said.
Fraudsters offering fake prizes and job opportunities
swindled tens of thousands of U.S. consumers, giving Western
Union agents a cut in return for processing the payments,
Between 2004 and 2012, the Colorado-based company knew of
fraudulent transactions but failed to take steps that would have
resulted in disciplining of 2,000 agents, authorities said.
“Western Union is now paying the price for placing profits
ahead of its own customers,” said Acting Assistant Attorney
General David Bitkower.
A Western Union spokesman said that the company didn’t “do
as much as it should have” to oversee its agents between 2004
and 2012 but is committed to improving its procedures.
Western Union, which helped clients move over $150 billion
in 2015, said in a press release that more than one-fifth of its
work force is currently devoted to compliance. It also said
consumer fraud accounts for less than one-tenth of 1 percent of
The settlement will fund refunds for customers who were
victims of scams, authorities said. It will also implement a
comprehensive anti-fraud program to train agents to identify and
stop transactions that result from fraud.
Between 2004 and 2015 Western Union collected 550,928
complaints about fraud, with 80 percent of them coming from the
United States where it has some 50,000 locations, the government
complaint said. The average consumer complaint was for $1,148,
the government said.
Western Union reported revenues of $1.4 billion for the
quarter that ended on September 30, 2016, according to a
government filing. The company said it spent some $200 million a
year on compliance.
#1 Lawyers Search Engine