Western Union Pays $586M Fine Over Wire Fraud Charges (reuters.com) 115
The head of the FTC says Western Union "facilitated scammers and rip-offs," while the company "looked the other way." An anonymous reader quotes Reuters:
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 Thursday. 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...
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, authorities said. 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... 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.
Reuters seemed to suggest that nearly one out of every thousand transactions was fraudulent, reporting that Western Union "said consumer fraud accounts for less than one-tenth of 1 percent of consumer-to-consumer transactions."
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, authorities said. 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... 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.
Reuters seemed to suggest that nearly one out of every thousand transactions was fraudulent, reporting that Western Union "said consumer fraud accounts for less than one-tenth of 1 percent of consumer-to-consumer transactions."
This was long overdue (Score:4, Funny)
Western Union has turned a blind eye to criminals using their services for fraud for decades. Why did this take so long?
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Western Union has turned a blind eye to criminals using their services for fraud for decades. Why did this take so long?
Yeah, the over-pay check scam has been going on since I can remember.
(Link below has autoplay video because SFGate hired morons to design their website.)
And can lead to wrongful arrest with no recourse. Especially by assholes like Bank of America [sfgate.com]
Re:This was long overdue (Score:5, Insightful)
They were fined 586 million dollars, which is pretty indicative of how much they stole. How many went to jail, well, apparently none. So the government still turning a blind eye to corporate criminals instead fining the investors. Corporate crime, the crime that pays quite well and when you get caught, well, someone else pays that fine, what a disgusting scam. Why is corporate crime out of control, this is exactly why corporate crime is out of control.
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The specific agents who conspired to help people get away with it were convicted [ftc.gov], per that article. So not really "turning a blind eye".
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This exactly. The CEO on down the chain to the individual employees who facilitated fraud need to be charged with felony wire fraud and face 10 years in the federal pen. On top of this, Western Union should be required to provide a full refund to every fraudulent transaction that they facilitated to the victims since their employees were helping facilitate the fraud. If it were truly 1 in 100,000 as they claim, they should be able to absorb the costs easily. If this bankrupts them, tough shit, don't let
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Speeding is not allowed either.
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...and is irrelevant to this discussion. I assume you are trying to make the point that just because something is not allowed doesn't mean people aren't going to do it. You're right, but so what? Ebay doesn't allow it because the risk of fraud is too high and they cannot control it. If you go around that rule and you get screwed, it's your own damn fault.
If you are buying from people on ebay that will not use paypal and insist on using western union, you should find another seller because you are probably g
Government Payday (Score:4, Interesting)
1. Does the $586 Million cover the losses of the individuals that were scammed?
2. Will they get it or is this a big, fat payday for the Government? (Hint: usually is)
Re:Government Payday (Score:5, Informative)
1. Does the $586 Million cover the losses of the individuals that were scammed? 2. Will they get it or is this a big, fat payday for the Government? (Hint: usually is)
Yes, it's for the individuals.
From the report:
Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website at https://www.justice.gov/crimin... [justice.gov] for instructions on how to request compensation through the Victim Asset Recovery Program.
So where are the criminal convictions? (Score:3)
Pay a fine, get off free?
Hope they follow-up in parallel with a criminal case.
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Tell them that next time the fine will be $200,000 per complaint, or ~$10 Billion.
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Re:So where are the criminal convictions? (Score:5, Interesting)
It's a large fine, but my question is why weren't the senior executives charged under the RICO laws and given the 20 year jail sentences and $100k per incident personal fines?
Why is it that if you're running under a corporate charter that you're excluded from being defined as running an ongoing criminal enterprise?
Which executive knew about which fraudulent transa (Score:2)
Which executive knew about which charge being fraudulent? If you can prove that a specific person committed a specific crime at a specific time, you can charge them.
Otherwise, it's not too different from "some people on Reddit probably did $BAD_THING, so lock up all of the people on Reddit".
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Isn't that the fucking FBI's job? To investigate all that shit, with their high-powered forensics and iPhone cracking, etc?
I mean, I can accept that nobody gets charged (in the same manner that a battered woman takes the next beating, because she's used to it), but at the same time the FTC announces a half-billion dollar fine for money laundering and we don't even HEAR about the ongoing FBI investigation into criminal culpability?
And spare me the "who committed what specific act" -- isn't the point of bein
uhm, no (Score:2)
> Isn't that the fucking FBI's job? To investigate all that shit, with their high-powered forensics and iPhone cracking, etc?
Yes, job of the FBI (and really more state police) is to investigate and get evidence regarding people who committed crimes. That was done, and the people who committed criminal acts, for which there sufficient evidence, are facing criminal charges.
You've said that "senior executives" have committed crimes, and even specified what sentence they should receive. Is there any evidenc
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but my question is why weren't the senior executives charged under the RICO laws
Usually because people who are calling for someone to be charged under RICO laws don't have a clue how RICO laws work.
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Maybe explain it to me like I'm 5 how RICO doesn't cover an organized conspiracy to facilitate money laundering.
If these guys were named Juarez or Gambino they'd have so many bugs and wiretaps on them the fucking ISS could detect a warp in the Earth's magnetic field.
But because they're corporate executives they get to pay a fine and nobody goes to jail.
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Your wish:
https://www.popehat.com/2016/0... [popehat.com]
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Pay a fine, get off free? Hope they follow-up in parallel with a criminal case.
Criminal punishment?
For those who lobby to face is a slap-on-the-wrist fine, to ensure corporate crime is worth repeating?
The legalized weed movement is growing, so I don't even have to ask what you've been smoking.
Re: So where are the criminal convictions? (Score:1)
I demand weed.
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You're so stupid it's disgusting.
I agree. Doesn't parent know that politicians, big-business people, and mafioso all exchange suitcases full of cash? They don't use western union. They have some bald guy handcuff it to his wrist and carry it over.
Close all WU branches in Nigeria (Score:3, Informative)
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All said, you also should not take my suggestion to the letter because I wrote it with a touch of humor in the midd
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I think you did not get the idea... Nigeria is usually where scammers are in person, if there are no WU agencies in Nigeria they would have to go to other countries to collect the money and so the scam would be more expensive or even impossible. To legitimate money transfers one should use common banks (I know, it's a pain in the ass to use them but it's a lot more secure than using the WU).
Some of the scammers are in Nigeria. They have been caught running the scams out of other countries and there are payment systems that specialize in transferring ill gotten money. Common banks don't always work either because some areas just don't have reliable/trustworthy banks. The single most legitimate use for WU is for immigrants to send money back to their extended families in their home countries.
All said, you also should not take my suggestion to the letter because I wrote it with a touch of humor in the middle. If you would prefer a literal suggestion then my suggestion would be that no one should be allowed to send money to Nigeria (or any other country perhaps) without having a sender and a recipient duly identified that can be held liable for fraud if they happen.
Closer to a good idea provided it doesn't interfere with their intended use. A better idea would be
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Closer to a good idea provided it doesn't interfere with their intended use. A better idea would be for the agent to ask how the person knows you and what the money is for, but then the last time I sent a WU transfer (friend I met while travelling in Europe, met through someone I met who works at the Red Cross needed emergency money) The agent at the local store was just a cashier who had access to the WU terminal and had no training whatsoever.
Uh... You still have the basic problem of WU: How you will find the recipient if the transaction was a fraud? Anyone can get the money if he or she has the transaction identifier and the WU does not even require an identification (driver licence, social security number, etc) of who appears to receive the money. I described the bank as a better idea here because usually a person to be able to have a bank account needs to be found, he or she needs an address.
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online casinos used to use western union as well! (Score:2)
online casinos used to use western union as well!
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Re:What's the point of Western Union? (Score:4, Interesting)
I've discovered that quite a few folks in the US think that an offer to pay them via bank transfer is a sure indicator that I'm trying to scam them, or seeking to hack into their bank account.
Not to mention all the places in the US that *require* payment via cheque or other paper instrument. WTF? Is it still, like, 1975 there? Seriously--I've not written a cheque in close to 20 years, but on a recent visit there, I was obliged to buy some money orders because that was the only alternative they'd accept other than me coming in personally with a big wad of cash!
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Close. Through at least 1999, WU still operated on a mainframe that had been in service since 1974. There were scores of filing cabinets full of microfiche bundled with rubber bands.
For a company based on what was once high tech, they've been deathly afraid of it for a long, long time.
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I've never understood it. Why would someone use Western Union to transfer money instead of a normal bank transfer?
I think the legitimate use for it is for emergencies. If you break down 1000 miles from home and need money to get home, you call your dad collect and have them send you money via western union. My dad was a truck driver and they always used comcheck which is a similar system where money could be transferred instantly. The other semi legitimate use is to send money more easily across international lines. Western union is kindof like hawala. The idea is that you can give person A at one location $100 an
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While that all probably made lots of sense decades ago when there were no international bank transfers, nowadays it sounds quite complicated and involved compared to just entering a transaction in an online banking system, which is usually free and if not, probably cheaper than paying a third party such as Western Union.
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The big business doing this now is Wal-Mart and their "Woodforest Bank" branches inside the store - deposit in one town, withdraw in another. Fuel is still mostly bought, and loads are usually still paid for with cash, especially among independents, but most towns have a Wal-mart and drivers are rarely going down the road with $3-4K in the cab anymore.
Ass Backwards Banking in America (Score:2)
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Wow. So how do Americans receive their salaries and pay their bills? Or pay back e.g. a friend or a colleague?
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unlike every other first-world country you CANNOT do a general bank-transfer to another person/company in the US
What world do you live in? I have accounts at a few different banks, they all support online transfers.
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Wow. So how do Americans receive their salaries and pay their bills?
Salaries are usually sent by a payment service (large CSV file sent to the banks with a list of bank transfers to preform) Bill payments are generally the reverse of that (CSV sent to the bank pulling money from a list of accounts) or by credit card. None of those are designed for person to person transfers.
Or pay back e.g. a friend or a colleague?
Cash, Cheque, or PayPal
The whole North American system is pretty screwed up with Canada only being a marginal improvement over the American system.
Here in Canada, my bank allows me to send personal tra
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A Bank Transfer of funds, c.f. Canadian Banks email money transfer - does not give out (or require) your checking information nor your "Debit Card".
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as unlike every other first-world country you CANNOT do a general bank-transfer to another person/company in the US
This is false. I've done that plenty of times. Where are you getting your information?
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you CANNOT do a general bank-transfer to another person/company in the US - the exception being that some banks (like Chase) allow for bank transfers to other Chase customers.
This assertion is not true. A very large number of people (including myself and most of the employees at my wife's restaurant) are paid by direct deposit into their back accounts. I also use external transfers from my credit union to transfer money to my son's bank account and that of my wife's restaurant.
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Bank transfers have a few issues.
1. While in-country transfers are usually free or cheap and easy to perform international transfers are often expensive and awkward.
2. At least the US and the UK have direct debit systems which work based on bank account numbers and have little security. This makes people reluctant to give out their bank account numbers.
3. Poor people often don't have bank accounts. This goes double for poor people living in poor countries or poor people living as illegal immigrants in rich
not all of them (Score:1)
The agent in my local town stopped my dad from sending $1500 to a "friend in need" that contacted him by text message. I told him it was a scam before he tried to transfer. He was upset that they didn't let him send money. I told him to CALL his friend, and that was the last I heard about it.
Anecdote about Western Union (Score:5, Interesting)
My mother-in-law got a phone call saying that she owed back taxes and would be arrested if she didn't pay. Now, this is a woman who has no income other than her pension. She went to a Western Union and tried to transfer money to pay the fraudster, and the agent refused to let her send the money. She was furious, and called my wife, who fortunately told her mom that she is an idiot who should thank the agent.
If this is the kind of fraud they are talking about, I sympathize with Western Union. How exactly do they determine what is fraudulent, and what should they do?
The ftc.gov filing says:
Western Union’s failure to comply with anti-money laundering laws provided fraudsters and other criminals with a means to transfer criminal proceeds and victimize innocent people
Can anyone post what those "anti-money laundering laws" say? I am curious how the average Western Union employee would really know if something is fraud, and deal with it.
Re: Anecdote about Western Union (Score:1)
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perhaps WU does not adequately train their employees to recognize fraud.
That in itself is problematic. How many WU employees are the ones at the counter selling the service in the US? Usually its the supermarket customer service desk or quick mart employees, not WU employees.
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Did you read the actual complaint [ftc.gov]? Your questions are mainly answered there.
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No, I'm looking at it now. I think you are right, the details are there.
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I dont know what the law says but it is probably that they didnt take enough information from the people sending money and that they didnt check the ones receiving it, basically didnt take valid ID's on the sender or reciever, can be also that they failed to report to the government that person or wu office X was sending/receiving Y money(if there are limits w
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Can anyone post what those "anti-money laundering laws" say?
The article lists a couple. Like, you have to report transactions larger than $10,000 in a single day. So the agents would break them up for the people so they would not be reported. And they got a cut of the scam money for always helping them out. Western Union didn't stop these people because they were high-volume, and thus high-profit.
Translation: (Score:3)
Government to WU: We've been watching you aid criminals all over the world, for years, and we didn't say anything, but enough is enough!
We want a cut.
Big whoop (Score:2)
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Re: Big whoop (Score:2)
Class action? (Score:1)
Now that they've been fined by gov't, I wonder if we're likely to see a class-action follow by all the people that've been victims of WU's pandering to fraudsters? One doesn't exclude the other, after all (actually, I'd imagine a regulatory fine might be useful to a lawyer in a class-action).
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In Obama America WU supported the Nigerian scammers
Re:In Trump America (Score:5, Interesting)
Matter of fact, back during the GWB administration, my local supermarket had a WU advertising poster offering a discount rate on money transfers to Nigeria. Now we don't have any unusual concentration of Nigerian immigrants here -- most of the money transfers go to Mexico -- so the only visible motivation for this offer was to cash in on the Nigerian scam.
And knowing the intelligence level of the target market, the poster added that WU would give the customer less than the going currency exchange rate and keep the difference.
The poster came down in 2008.
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Which is probably why he said "during the GWB administration", given that it was still in office in 2008.
Though, honestly, I doubt either administration had anything to do with any of this stuff. This is corporate fraud, plain and simple, and that happens under every administration.
Re:In Trump America (Score:5, Informative)
Wow. I was curious to see if I could find a copy of this poster so did a quick search.
I couldn't find the poster searching for "western union nigeria poster", but this link - titled "Send money to Nigeria [westernunion.com]" - is totally lacking any kind of warning. Maybe Nigerian spam has petered out a bit recently but it still seems like there should be at least a warning in the footnotes!
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