AG Coffman Announces Multi-Million Dollar Settlement with Western Union for Failing to Protect Consumers from Scams | Attorney General - State of Colorado

AG Coffman Announces Multi-Million Dollar Settlement with Western Union for Failing to Protect Consumers from Scams

DENVER- Colorado Attorney General Cynthia H. Coffman today announced a multi-million dollar settlement with The Western Union Company.  The settlement resolves a multistate investigation into the Colorado company which focused on complaints from consumers who used Western Union’s wire transfer service to send money to third parties involved in schemes to defraud consumers.  In addition to Colorado, 48 states and the District of Columbia participated in this settlement. 

“Criminal scam artists regularly trick our people, especially our elderly citizens, into wiring money using a variety of cons including lottery scams and the “grandchild in need of immediate funds” scam,” said Attorney General Coffman.  “For too long Western Union has not done enough to prevent these frauds, and in some cases Western Union employees have actually been in on the scam. I am glad that this settlement will help to put in place protections for consumers.”

Shut-ins and elderly individuals living alone are subjected to the millions of telephone calls originating from overseas intent on tricking them into wiring money.  Under this agreement Western Union will have to do more to warn consumers before, for example, they wire money to known hotspots of fraud such as Nigeria or China.

Western Union also has agreed to pay a total of $5 million to the states for the states’ costs and fees. 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 $586M to a fund that the Department of Justice will administer to provide refunds to victims of fraud induced wire transfers nationwide, including Colorado victims. Information for victims will soon be posted on the Department of Justice website at https://www.justice.gov/criminal-afmls/remission

The settlement requires that Western Union implement a comprehensive fraud detection program designed to prevent incidents where consumers use Western Union to wire money to scam artists.

Under the anti-fraud program, Western Union will be required to provide:

•          Anti-fraud warnings on 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;

More information about this settlement is available here.