Good news! The next time you go to wire your life savings to a prince from the country of New Africa that needs your help to claim his thousand million dollar inheritance, Western Union may not let you. As a result of a joint Justice Department and Federal Trade Commission prosecution, Western Union not only has to pay over half a billion dollars to the feds, they must implement new policies to safeguard consumers from getting scammed.
As part of the settlement, Western Union admits guilt to the criminal violations of "willfully failing to maintain an effective money laundering program and aiding and abetting wire fraud." These crimes are related to scammers, confidence artists, and organized crime utilizing Western Union to perpetrate financial crimes. The money collected by the feds will be made available to the victims of fraud that have sent money via Western Union.
From Telegram to Telescam
Western Union achieved notoriety as a result of the telegram business. Back before the telephone was a convenience to be taken for granted, the telegram was among the fastest methods of communication.
As technology improved throughout the 20th century, the telegram became a thing of the past. So, Western Union, rather than fading into the past with its outdated technology, changed their entire business model and went from sending communications to sending money. At their height in the telecom industry, Western Union owned a fleet of satellites. Unfortunately, with the rise of the internet, Western Union and other money sending services have seen their businesses increase in popularity among online criminals and scammers.
New Safeguards From Money-Sending Scams
Because of the way Western Union operates, allowing individuals to send money worldwide nearly instantly without ID or verification, scammers will frequently ask their victims to pay via Western Union.
In addition to the large financial penalty, Western Union has agreed to implement new policies designed to prevent consumers from sending money to scammers. Some of the policies include:
While Western Union can't save all consumers from scammers, the new policies will go a long way in reducing the number of consumers that get scammed.