CHARLESTON — West Virginia Attorney General Patrick Morrisey's office has announced the state’s involvement in a $591 million settlement with Western Union Company, resolving a multistate investigation into consumer usage of the wire transfer service to send money in a wide variety of third-party scams.
West Virginia Attorney General Patrick Morrisey
Approximately 2,300 consumers living in West Virginia are eligible for refunds totaling $2.9 million.
“Today’s settlement is an important victory in protecting consumers,” Morrisey said on Jan. 31. “I believe this will institute key safeguards, however it is no replacement for common sense and caution. Consumers must carefully evaluate any unexpected email, phone call or letter requesting payment or personal information.”
Western Union reached the settlement with West Virginia, 48 other states and the District of Columbia. It requires the company to develop and implement 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.
Such schemes involve lottery and contest scams, grandparent scams and tax scams, all of which have been the subject of alerts issued by the Attorney General’s Consumer Protection Division.
That anti-fraud program, which Western Union has agreed to evaluate and update as warranted, includes the following elements:
* Anti-fraud warnings on forms 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 will pay the consumer refunds as part of a $586 million fund administered by the U.S. Department of Justice. Separately, the company will pay states and the District of Columbia $5 million to cover costs and fees.
“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," the company said in a statement. "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