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January 23, 2017 02:00 pm

Western Union Pays $586M Fine Over Wire Fraud Charges

The head of the FTC says Western Union "facilitated scammers and rip-offs," while the company "looked the other way." An anonymous reader quotes Reuters:The world's biggest money-transfer company agreed to pay $586 million and admitted to turning a blind eye as criminals used its service for money laundering and fraud, U.S. authorities said on Thursday. Western Union, which has over half a million locations in more than 200 countries, admitted "to aiding and abetting wire fraud" by allowing scammers to process transactions, even when the company realized its agents were helping scammers avoid detection, the U.S. Department of Justice and the Federal Trade Commission said in statements... Fraudsters offering fake prizes and job opportunities swindled tens of thousands of U.S. consumers, giving Western Union agents a cut in return for processing the payments, authorities said. Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents, authorities said... Between 2004 and 2015 Western Union collected 550,928 complaints about fraud, with 80 percent of them coming from the United States where it has some 50,000 locations, the government complaint said. The average consumer complaint was for $1,148, the government said. Reuters seemed to suggest that nearly one out of every thousand transactions was fraudulent, reporting that Western Union "said consumer fraud accounts for less than one-tenth of 1 percent of consumer-to-consumer transactions."

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