Western Union to pay $586m fine for money transfer fraud
Not always for better…
Western Union has admitted turning a blind eye as criminals used its money transfer services to launder money and commit fraud. It has agreed to pay a $586 million fine to the US authorities.
The US Department of Justice and the Federal Trade Commission stated Western Union agreed it was “aiding and abetting wire fraud”. Chinese immigrants used the service to send hundreds of millions of dollars to pay human smugglers, transferring the money in small instalment via Western Union’s network to avoid federal reporting requirements, they explained. Western Union agents were receiving a cut in return for processing payments.
It has transpired that between 2004 and 2012, Western Union was aware of this but did not take any steps to rectify the situation or discipline the 2,000 agents involved, according to the US authorities.
In the word of David Bitkower, Acting Assistant Attorney General, “Western Union is now paying the price for placing profits ahead of its own customers.”
The $586 million settlement will go towards refunding the customers who were victims of scams.
Western Union said in a statement that it now has more than a fifth of its entire workforce dedicated to compliance. The company is also putting in place a comprehensive training programme for its agents, to help identify and prevent fraudulent transactions.
