New Jersey Joins Multi-State Settlement Addressing Complaints Against Western Union Linked to Fraud-Induced Wire Transfers
TRENTON – Attorney General Christopher S. Porrino announced today a multi-state settlement with The Western Union Company that resolves an investigation by the participating states focused on fraud-induced money transfers – specifically, the wiring of money by unwitting consumers to third-party con artists using Western Union’s wire transfer service.
Under the settlement, Colorado-based Western Union is required to develop and put into action 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 scammers. New Jersey is a member of the multi-state Executive Committee leading the Western Union investigation.
“Regrettably, con artists use all types of ruses to convince people to wire them money – and they sometimes succeed,” said Attorney General Porrino. “These cons run the gamut from the ‘grandchild in distress’ ploy -- in which a perpetrator contacts a grandparent and falsely claims that funds must be wired to help the grandchild out of a legal or medical crisis -- to contest scams, in which people are tricked into wiring money to pay the taxes and fees on their ‘winnings.’ It’s incumbent on wire-transfer services like Western Union to be vigilant in this area, and to employ operating practices that make it harder for criminals to defraud honest consumers.”
The anti-fraud program required under the settlement, which Western Union has agreed to evaluate and update in the future as warranted, includes the following elements:
- Anti-fraud warnings on “send” 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
Under the settlement, Western Union has agreed to pay the participating states a total of $5 million to cover costs related to the investigation. New Jersey is expected to receive approximately $200,000.
Noting that the Internet and social media have added new avenues for potential exploitation by scam artists, Attorney General Porrino cautioned consumers to watch for scams in which a con artist – typically met on-line – may pose as a new love interest or friend then, in short order, begin asking for wired money to help with medical emergencies, a car accident, theft, property damage, a need for emergency travel, etc.
“A consumer who meets someone on-line should be cautious about wiring that person money -- particularly if there’s never been any in-person contact,” Porrino said. “Unfortunately, it happens all too often that the victims of on-line friendship and romance scams end up sending money to the scam artist multiple times before realizing they’ve been duped.”
In addition to the multi-state settlement announced today, Western Union has settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice (DOJ). As part of those separate but related federal settlements, Western Union has agreed to pay a total of $586 million to a fund that DOJ will administer to provide refunds to victims of fraud-induced wire transfers nationwide.
Deputy Attorney General Cathleen O’Donnell, of the Division of Law’s Consumer Fraud Prosecution Section, handled the Western Union matter on behalf of the State.