U.S. ruling found company failed to properly protect customers against fraudsters
May 2, 2018 (Courtesy of CBC.ca) –
Police departments across Canada are informing fraud victims who sent funds through Western Union that they may be eligible to get some of their money back.
Western Union has been ordered to pay back $586 million after the American Federal Trade Commission and Department of Justice ruled the company failed to properly protect its customers against fraudsters. The company admitted to aiding and abetting wire fraud.
The ruling took place in the U.S., but Canadians are also eligible to cash in on the refunds.
“It’s definitely a win for those victims,” said Todd Kossow, director of the Federal Trade Commission’s Midwest region office.
A wide variety of scams are covered by the settlement, including promised prizes, advance-fee loans, discounted items for money paid up front, as well as personal scams such as pretending to be family members, police officers or romantic partners.
According to the release, which was sent out by Halifax Regional Police on Tuesday, anyone who used Western Union to transfer funds to a fraudster between January 2004 and January 2017 is eligible to submit a claim.
During that period, there were at least 550,000 complaints made to Western Union directly, reporting total losses of $632 million, according to the American Federal Trade Commission (FTC).
Kossow said that’s “just the tip of the iceberg.”
“We think actual losses and actual victims, the numbers are much higher than that.”
Unknown number of Canadian complainants
FTC spokesperson Frank Dorman said in an email to the CBC that Canadians are among the victims, but he doesn’t know the exact number.
“Eighty per cent of the complaints we received were from U.S. victims. The other 20 per cent were from around the world.”
From Vancouver to Halifax, police have been advising the public they could see their money again, but say it’s hard to know exactly how many Canadians are involved.
Sgt. Steve Betteridge with Windsor police told the CBC that 150 to 200 people reported they were victims during that time period, but said the number could be even higher.
RCMP in Nova Scotia, Halifax Regional Police and the Vancouver Police Department all said people in their areas were affected, but couldn’t say exactly how many.
“We do believe there are people in HRM [Halifax Regional Municipality] who have been impacted by this and that is why we made the decision to disseminate to the public advisory,” said Const. Carol McIsaac.
Money transfers popular with scammers
Money transfers are the No. 1 method of payment for scammers, according to FTC data, said Kossow.
“And again, consumers have no rights once the transfer has been sent and picked up. They don’t have the opportunity to get their money back.”
Future fraud prevention measures
The court order includes specific provisions to ensure Western Union prevents fraudulent transfers in the future, Kossow said.
This includes a compliance auditor to keep the company on track for three years, an anti-fraud program, stronger vetting of new agents and disciplining or firing agents complicit in the frauds.
Claire Treacy, speaking for Western Union, said in an email to CBC News that the company is co-operating fully with the court order.
“Western Union shares the government’s goal of protecting consumers from fraud and is co-operating fully with DOJ [Department of Justice] to see that consumers are reimbursed in accordance with the terms of the settlement.”
If the agent didn’t follow proper procedures, Western Union has to refund the money — “which is something that you need,” said Kossow.
“There was no opportunity for consumers to get refunded prior to this order.”
The deadline to submit a claim is May 31 and it will take about a year for the claims to be assessed. Claims can be made by visiting http://westernunionremission.com/
Marina Burghard writes for Canadian Fraud News about fraud-related cases, whistleblower, jurisdiction, identity theft, consumer protection, etc. – essentially about scams and how to protect yourself against this kind of fraudulent criminal behavior. She holds a Master’s degree in Political Science where her interest in criminology grew. Besides fraud, Marina’s scientific interest lies in terrorism, extremism and how to deal with it as a society.