I find this interesting because I just saw a story in my local news about Western Union getting flack because they were making it difficult for certain customers to send money to known terrorist countries. They were called 'bigoted' and 'racist'.<p>They really can't win here. If they allow anyone to send money anywhere, they get fined by the government for supporting criminals. If they try to make a judgment call, the public gets up-in-arms about it and thinks they are bigoted (and potentially lose customers or get involved in other lawsuits).
Here's the US Justice Department, the Federal Trade Commission, and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) complaints:<p><a href="https://consumermediallc.files.wordpress.com/2017/01/wufsi-assessment-of-civil-money-penalty-1-19-2017.pdf" rel="nofollow">https://consumermediallc.files.wordpress.com/2017/01/wufsi-a...</a><p><a href="https://consumermediallc.files.wordpress.com/2017/01/western_union_complaint-jan2017.pdf" rel="nofollow">https://consumermediallc.files.wordpress.com/2017/01/western...</a><p>_________<p>And the related official DOJ announcement covering the agreement:<p><a href="https://www.justice.gov/opa/pr/western-union-admits-anti-money-laundering-and-consumer-fraud-violations-forfeits-586-million" rel="nofollow">https://www.justice.gov/opa/pr/western-union-admits-anti-mon...</a>
I got hit by credit card fraud related to this story.<p>I either got skimmed at a gas pump or at a restaurant.<p>What I saw were 4 Western Union transactions on my card, each for $255 USD. Two per day with this string - "WU*XXXYYYZZZZ" - where XXXYYYZZZZ is a phone number.<p>My issuer shut down the card and issued me another one. I was not responsible for the charges.<p>Also, the issuer said the reason they did not send me a fraud message was because the charges were occurring around the holidays where large charges are commonplace.
In other words, Western Union is guilty of not being zealous enough at being a quasi-law enforcement agency and investigating its customer transactions...<p>To those cheering here, you should remember this next time you try to open a bank account or make a payment, and your bank wants to see a thousand of proofs and certificates before moving a finger.
Western Union has also been aiding international fraud from romance scammers etc. Even though they know the sources are suspicious they still let people send large amounts of money to countries like Ghana and Nigeria.
>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.<p>So there were 2,000 Western Union employees in on this scam? That sounds like a huge number.<p>Also, a $586m fine for a company that makes $14b a quarter? Is that stardard?
This reminds me of how Google does nothing about AdWords frauds: try to forget disabling third-world countries and your website will all of a sudden be most popular in Nigeria and Afghanistan (that's what they said when I confronted them about it, that people in Nigeria where interested in the content even though it was in Italian).<p>I guess when a big percentage of a company's profits come from fraud, they're not incentivised to fix the problem.
Amazing there hasn't been a mention of TransferWise in this thread<p>You get about 1.5% more money with them when you do a transfer.<p>Their low cost model is driven by using automated KYC checks and the kinds of fraud models you'd expect from a web startup<p>More here<p><a href="https://transferwise.com/gb/compare/western-union-exchange-rate" rel="nofollow">https://transferwise.com/gb/compare/western-union-exchange-r...</a>
Disclosure - I'm an employee - but the hype in this case is warranted
Scammers in a foreign country used Western Union to steal from my grandfather. Glad to see a penalty that will hopefully encourage W.U. to put better controls in place going forward.<p>Chose to post this comment because I see a lot of people in the thread effectively asking "does this really happen" or "who are these stupid people that get scammed" and I figured letting the HN community know that at least one or our members has been personally affected might bring a different level of consideration to the topic.<p>Edit: Seeing this headline feels great. I can't describe the feeling of frustration at not being able to help my family solve the case when the fraud happened or the extreme anger I felt that the scammers pretended to be a grandchild calling my grandfather for help, using one of our names to legitimize the scam. Ever since, I introduce my self by name when I call my remaining grandmother and I worry when she tries to recognize me before I have a chance to introduce myself. I hope no one else has to experience this.
It's no secret who's using WU. Just count the number of locations they have in "hackerville" (pop ~110k)<p><a href="http://locations.westernunion.com/search/romania/vl/r%C3%A2mnicu%2Bv%C3%A2lcea" rel="nofollow">http://locations.westernunion.com/search/romania/vl/r%C3%A2m...</a>
To be more specific, Western Union consented to the imposition of a civil penalty by FinCEN and entered into a deferred prosecution agreement with the DOJ, for violations of the Bank Secrecy Act and aiding and abetting wire fraud. It also settled with the FTC for failing to mitigate fraud reported by consumers. Details here: <a href="https://consumermediallc.files.wordpress.com/2017/01/wufsi-assessment-of-civil-money-penalty-1-19-2017.pdf;" rel="nofollow">https://consumermediallc.files.wordpress.com/2017/01/wufsi-a...</a> <a href="https://www.justice.gov/opa/pr/western-union-admits-anti-money-laundering-and-consumer-fraud-violations-forfeits-586-million" rel="nofollow">https://www.justice.gov/opa/pr/western-union-admits-anti-mon...</a>.
Didn't the Citizens United vs. FEC case argue that money is free speech, and therefore campaign finance laws limiting Super PAC's spending were overturned?<p>How might that affect banking laws that require banks to flag suspicious transactions and restrict who can send and receive funds? Have the banking laws that restrict payments ever been challenged in court as a free speech issue?<p>Just wondering if these two dots are in any way connected. I am not pro-money laundering but also don't like the idea of government overreach. Thinking that since banks are non-government that the constitutional protections don't apply, but what about the laws that bring about the banking regulations?
"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.'"<p><a href="https://yro.slashdot.org/story/17/01/23/0658205/western-union-pays-586m-fine-over-wire-fraud-charges" rel="nofollow">https://yro.slashdot.org/story/17/01/23/0658205/western-unio...</a>
Is this a class action lawsuit? My quick searches point to no.<p>My elderly mother-in-law got scammed, and it was pretty ridiculous how WU allowed it to go through given the circumstances.<p>Just wondering if/how to potentially get some of the $ back via this lawsuit.
I got hit with a Western Union scam when I was a teenager. I spent numerous hours on the phone with WU trying to get any information on who picked up the money. Name, id, or even city where they picked it up. WU understood I had been robbed but refused to help me.<p>Apple should be next. Once I had an iPod stolen and Apple refused to help me recover it. They wouldn't give me the IP or geolocation of where it was or even tell me if it connected to iTunes and whos account it connected as.<p>From these two events, I always felt that Apple and Western Union aided and protected criminals and thieves.
When it comes to fraud, no Nigerian past, present or cumulative can match American Robert Allen Stanford talk less, Bernie Madoff.<p>So what is the point of all the Nigerian bashing here?
Key takeaway IMO:<p>"the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents"<p>Western Union was <i>already aware</i> of fraud they were facilitating, but did not take steps to either report or prevent it.<p>It's one thing to not investigate suspicious behavior, it's another thing entirely to be aware of actual fraud, and ignore it.
Phh mortgage uses these guys and the whole thing is a scam. Phh mortgage needs to be shorted into bankruptcy. Fannie Mae shouldnt even allow them to service loans.
More I read about such stuff, more the idea of a "decentralized" financial system with "no trusted party" makes sense. Fiat has lot's of problems in this globalization. It was never meant to be used globally. It's time we upgrade! It's time for bitcoin.
This is really good. Perhaps now they will put some controls in place to try to reduce this. Don't want granny sending money to con artists via Western Union.
I'm pretty sure the real damage is at least 100x larger than that. But hey, this will allow some US authority to declare victory and their heads will get bonuses/promotions.<p>The $586M mentioned covers 8 years (2004-2012). So $73M/year.<p>In 2015 they moved $82B.<p>Edited:<p>This settlement is saying the amount of money they move fraudulently is less than 0.1% of their total money movements. This seems entirely implausible. 10% seems a lot more plausible.