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Western Union Fraud Case: How to File a Claim

Banking, Banking News
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In January 2017, global money transfer service Western Union agreed to pay the U.S. government $586 million as part of a settlement with the Department of Justice, the Federal Trade Commission and other government agencies for “willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud,” according to a DOJ press release.

The Justice Department will use that money to give refunds to people affected by the fraudulent transactions, which included scammers pretending to be relatives in need of cash or requesting money through Western Union in exchange for prizes or job opportunities.

If you think you are owed money, you have until May 31 to file a claim. Here’s a look at how the process works.

Who should file a claim

If you think you were affected by the Western Union fraud case between Jan. 1, 2004, and Jan. 19, 2017, consider filing a claim. The Federal Trade Commission recommends that you do so online by visiting FTC.gov/WU, which features links to the claims website, as well as other helpful information. You can also file a claim via regular mail, but because the document will contain your Social Security number, the FTC recommends doing so online.

If you’ve already reached out to Western Union, the FTC, or a different government agency, you may have been mailed a pre-filled claim form. You can use information in that form to file your claim online. If you didn’t receive a pre-filled claim form, you can still submit a claim online.

What you’ll need to file a claim

When filing a claim, you’ll be asked to provide basic information, such as your name and address, along with as much information as possible about your Western Union transaction, including the amount of money you transferred and the date of the transaction. You’ll also be asked to provide your Social Security number or Individual Taxpayer Identification Number.

Copies of Western Union receipts or transfer send forms can help prove exactly how much money you lost. If you have those types of documents, attach copies or images of the original documents to your claim.

How much money you might receive

If your claim is verified, the size of your refund will depend on how much money you lost and the number of claims the Department of Justice is able to validate. The entire process, including claim verification and sending out checks, could take one year.

The backstory

Western Union’s “system facilitated scammers and rip-offs,” then-FTC Chairwoman Edith Ramirez said in a January 2017 press release, which also stated that the business violated U.S. laws by processing “hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.”

Western Union knew of these infractions but failed to take “corrective action against Western Union agents involved in or facilitating fraud-related transactions,” according to the DOJ press release. The bulk of the misconduct occurred between 2004 and 2012, and involved 2,000 Western Union agents.

Fraudsters contacted people and told them to send money via Western Union in return for prizes or job opportunities. Western Union agents were involved in these transactions, “often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds,” the FTC’s press release said.

As part of the settlement, Western Union was also ordered to incorporate anti-fraud practices into its business model.

In a company press release, Western Union said it would “pay a total of $586 million to the federal government, which is to be used to reimburse consumers who were victims of fraud during the relevant period.”

Tips to avoid fraud

There are precautions you can take to avoid money transfer fraud:

  • Never wire money to people you don’t know. Scammers may pretend to be a family member or might say you won a lottery or sweepstakes. Don’t send them money.
  • Don’t send money if you’re feeling rushed or confused. If you’re being asked to send money immediately, first make sure that you know who the recipient is and why he or she is asking you for money.

Visit the FTC website for more tips about avoiding scams.

NerdWallet writer Spencer Tierney contributed to this report.