Lansing, MI – February 1, 2017 – Michigan Attorney General Bill Schuette today announced a settlement with Colorado-based Western Union Company, resolving a multistate investigation into the Western Union’s wire transfer service being used to send money to third parties involved in schemes to defraud consumers. In addition to Michigan, 49 states and the District of Columbia participated in this settlement. Michigan will receive $85,522 for joining the settlement.
“Con artists dream up all kinds of schemes to convince consumers to wire them money; an ideal payment form for scammers because it is quick, anonymous, and irretrievable,” said Schuette. “It is important for consumers to be aware of these types of scams because wiring money is like sending cash – once it’s picked up, it’s gone.”
From January 2004 to August 2015, Western Union received complaints from Michigan consumers totaling over $16 million in reported losses wired through Western Union for fraudulent prize winnings, family emergency calls, advance-fee loan, online dating and other scams.
The settlement requires Western Union to develop and put into action a comprehensive anti-fraud program designed to help detect and prevent incidents where consumers who have been the victims of fraud use Western Union to wire money to scam artists.
That anti-fraud program, which Western Union has agreed to evaluate and update as warranted, includes 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; Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures.
Western Union also has agreed to pay a total of $5 million to the states for the states’ costs and fees. Michigan will receive $85,522 for joining the settlement.
In addition to this settlement with the states, Western Union also settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice that was announced on January 19, 2017. As part of those related settlements, Western Union has agreed to pay $586 million to a fund that the Department of Justice will administer to provide refunds to victims of fraud-induced wire transfers nationwide, including Michigan victims. The Department of Justice is in the process of hiring a claims administrator to manage the refund process. Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website.
Western Union Wire Transfers
If you’ve wired money to a scam artist, call Western Union immediately to report the fraud and file a complaint. You can reach the complaint department at 800-448-1492. Even if it’s too late to reverse the transfer, reporting fraud can help protect other consumers by assisting Western Union to identify and take appropriate action against agents who do not take reasonable and required steps to reduce fraud-induced transfers.
Then, file a complaint with your local police department and the Federal Trade Commission (FTC). Visit the FTC’s website, or call toll-free 877-FTC-HELP (877-382-4357; TTY: 866-653-4261.
How to Spot Wire Transfer Scams
The schemes change over time, but continue to include:
Lottery and Prize Scams: Consumers are told they have won a large sum of money but must first wire money to pay required taxes or fees before receiving their winnings; Romance Scams: Someone poses as a love interest and then soon begins asking consumers to wire money for various reasons, such as medical emergencies, car accidents, etc.; Grandparent scams: A consumer believes his or her loved one is in immediate danger and needs money right away, and countless others.
It is important to keep a few tips in mind to help consumers avoid falling victim to wire transfer scams:
Consumers who receive solicitations from strangers promising big winnings should toss those letters in the trash, delete the e-mail or hang up the phone. Keep in mind that it’s illegal for a telemarketer to ask you to pay with a money transfer, so if a telemarketer asks you to wire money, you already know it’s a scam. Consumers who meet someone online should be always be cautious about wiring money, particularly if meeting in person has never taken place.
To help educate consumers on scams often associated with money transfer services, Schuette is calling attention to his Grandparents Scam and Telemarketing Fraud consumer alerts.
Attorney General Schuette encourages victims of unfair, misleading, or deceptive business practices to contact the Department’s Consumer Protection Division at 517-373-1140 or toll free at 1-877-8388.
To file a consumer complaint, Michigan residents can submit an online complaint through the Attorney General’s website or mail a letter explaining the problem to:
Michigan Attorney General Bill Schuette
Consumer Protection Division
P.O. Box 30213
Lansing, MI 48909
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