Vermont Business Magazine Vermonters who were deceived into sending payments to scammers using Western Union’s wire transfer service may be entitled to compensation in a multi-statesettlementreached by Attorney General TJDonovan, 48 other states, the District of Columbia, and Western Union. The State of Vermont will receive a significant payment of $400,000 from Western Union in recognition of its role in leading the multi-state investigation. Western Union will pay a total of $5 million to the participating states and the District of Columbia to resolve these claims.
Western Union will pay $586 million to the federal government in a related, but separate, settlement with the Federal Trade Commission. These funds will be used to pay refunds to consumers who were victims of fraud that involved payments sent through Western Union. Since 2004, over 1,100 complaints have been filed by Vermonters about fraudulent transactions on Western Union’s system, reporting over $1,250,000 in losses. Any person who lost money due to a scam involving money sent through Western Union’s system will be able to apply for a refund through theDepartment of Justice’s Victim Asset Recovery Program. The Vermont Attorney General’s Office will issue a follow-up press release to notify the public when the Victim Asset Recovery Program begins accepting applications for compensation.
Under Vermont’s multi-state settlement, Western Union will improve their anti-fraud program to prevent the perpetration of fraud in the future. Western Union will provide prominent warnings to consumers; train their agents to prevent fraud; and take disciplinary action against employees who facilitate the fraud.
Attorney General Donovan reminds Vermonters to be wary of anyone asking them to send money by wire transfer. It is likely that you are talking to a scammer if someone is telling you to send them money to collect sweepstakes winnings, pay a tax debt, protect your computer, or help out a family member or an online acquaintance you have not met in person. If you fear that a friend or family member is in trouble, verify independently that the person needs assistance before sending any money. The Attorney General’s office encourages Vermonters to reach out to our Consumer Assistance Program if they have questions or concerns at 1-800-649-2424 orhttps://www.uvm.edu/consumer/.
The Western Union Company (NYSE: WU) provided the statement below in response to the announcement.
The company said: “We share the goals of the attorneys general and are committed to protecting consumers and the integrity of our global money transfer network from abuse by bad actors. That’s why we have significantly enhanced our compliance program in recent years by adding more employees with law enforcement and regulatory expertise, strengthening our consumer education and agent training, bolstering our technology-driven controls and having our Chief Compliance Officer report directly to the Compliance Committee of the Board of Directors.
“Over the past five years, we have increased overall compliance funding by more than 200 percent and now spend approximately $200 million per year on compliance, with more than 20 percent of our workforce dedicated to compliance functions. The incidence of consumer fraud reports associated with Western Union money transfers has been extremely low – less than one-tenth of 1 percent of all consumer-to-consumer money transfer transactions during the past 10 years. Over the last five years, the dollar value of reported fraud in consumer-to-consumer transactions, compared with the total value of all such transactions, has dropped more than 60 percent.”
Western Union on January 19th announced resolutions with the Department of Justice (DOJ), FTC and Financial Crimes Enforcement Network (FinCEN), which included a payment of $586 million for reimbursement of fraud victims and a commitment to certain compliance enhancements. More information about the DOJ administered reimbursement program can be found on its website.
Sources: Vermont AG. Western Union. Jan 31, 2017