Western Union agrees to return $586 M to relieve scam victims who unwittingly used their wire service


By Jun Nucum

The Federal Trade Commission (FTC) and the Department of Justice (DOJ) announced that Western Union (WU) Company reached a joint settlement for the return of $586 million to estimated hundreds of victims who unwittingly used Western Union to wire money to scammers in a move that would somehow ease the burden of said victims.

Western Union, the world’s largest money transfer company, has settled for this agreement to ease the burden on scam victims who unknowingly used their transactions system. This came about after a lawsuit was filed against WU after a joint investigation by the FTC, DOJ and the U. S. Postal Inspection Service (USPIS). Western Union admitted to aiding and abetting in wire fraud.

In a recent tele-briefing moderated by New America Media (NAM) Executive Director Sandy Close, FTC Director for Midwest Region Todd Kossow (who litigated and supervised consumer protection cases in federal district courts against companies and individuals involved in many cases for consumers including money transfers) admitted that “it is unusual to get our money back from many types of scams (but victims) now have an opportunity to get back their money back but they need to act quickly in order to do so.”

Kossow was joined in the tele-briefing by Lois Greisman, associate director, division of marketing practices in the FTC’s Bureau of Consumer Protection.

“Many people (who are) eligible to get their money back from Western Union thought they won a prize or sweepstakes, that they owed back taxes from the IRS, or sending money to get a grandchild out of trouble. But these are all scams,” explained Kossow. “The gist of both the civil and criminal charges is that Western Union knowingly allowed using its money transfer system to defraud consumers. Essentially, it did not do enough to protect people from fraud and it did not properly discipline agents facilitating the fraud.”

For years, many people who lost money to scams sent their payment through a Western Union wire transfer. Scammers contacted people and promised prizes, loans, jobs, discounted products or other financial rewards in exchange for money upfront. They also pretended to be family members in need of cash or law enforcement officers demanding payment. The scammers told people to send money through Western Union. No one received the promised cash, prizes or services.

Many of the victims are seniors who have access to the internet but are usually susceptible to scams because they do not know much about double-checking or to screen for scammers.

Methods employed include the sweepstakes scam. Consumers were told they won a prize on Sweepstakes like the Jamaican lottery but they have to send money to pay fees like taxes from the winnings, through the Western Union before they get the prize money.

Seniors also fall prey to the grandparent scam. A grandparent in the U.S. got a call from somebody who impersonates a grandchild to ask them to wire money for help because the grandchild is supposedly in trouble in another country.

Minorities, on the other hand, are usually victimized by scams targeting their needs. Mostly on medical and legal immigration needs and fees are usually sent through Western Union.

Kossow advised anyone who lost money when they sent a money transfer through Western Union between January 1, 2004 and January 19, 2017 to submit a claim for the amount they lost. They may be eligible for a refund.

But they must act quickly. Filing a claim is only up to February 12.

“Those that previously reported a transfer through the Western Union to the FTC and to another government agency may have likely already received a claim form in the mail and they should go to a special web page the FTC set up for this purpose at ftc.gov/wu. Once they click the button that says “I have a pre-filled claim form”, they can then use the claim ID and PIN on the form to submit their claim online,” said Kossow. “They can make a claim on the amount shown on the form and need not provide additional documentation.

They can also make a claim for a larger amount. And then should submit any documentation they have to support that larger amount.”

Those who did not receive a form in the mail can also submit claims, added Kossow, and some that may not have any documentation are encouraged to still submit a claim with much needed information that may make them eligible for a refund, provide their social security numbers (SSN) or an individual taxpayer identification number (ITIN).

“Once a claim is submitted, the DOJ will take steps to verify it. If the claim is verified, it may take up to a year for people to receive a refund. The amount each consumer receives depends on how much they lost and the number of people who submit valid claims,” clarified Kossow who also emphasized even those outside of the U.S. may be refunded as it is an international restitution claim.

Greisman was quick to warn that the huge amount of settlement is too tempting for another set of scammers to take advantage of and victimize those who already have fallen prey to scams.

“Scammers follow the news and you can be sure their eyes are open wide when they read about the $586 million settlement with Western Union. If you or someone you know was approached by a scammer, please report them immediately to our payment providers such as the Western Union iTunes reload, and also file a complaint with the FTC. Complaints really matter.

Though we cannot help individuals on a one-on-one basis, those complaints help us and may help law enforcers across the country apprehend, identify and steal scammers,” Greisman reminded.

Greisman also wants everyone to start doubting if someone suddenly asks for upfront payment via wire transfers such as Western Union, or via gift card like Amazon as scammers may also ask that money be deposited on a card like moneypacks or reload it.

For more information and/or report a scam, go to ftc.gov/wu or call the administrator at 1-844-319-2124.