North Carolina gets share of Western Union fraud settlement
Consumers in North Carolina could be eligible for $256,000 in refunds as part of a settlement involving the Western Union.
In a news release, the Western Union admits anti-money laundering and consumer fraud violations and agreed to pay $5 million as settlement for loss incurred. This money will be shared between 48 states that were affected most by the violations.
As part of the settlement, the money transfer giant has also agreed to implement anti-fraud measures and to monitor and train its agents.
Earlier in January, Western Union had also announced that it will pay a total of $586 million to compensate victims of the fraudulent activities through the company’s money transfer service.
According to the reports released by North Carolina’s Attorney General Josh Stein, an estimated 16,000 people in this state were victims of the fraud money transfers laundered through the company’s money transfers service. The Attorney General also said that those who believe that they lost money can seek compensation through the United States Department of Justice’s Victim Asset Recovery Program.
The spokeswoman for the state AG’s office, Laura Brewer, has also released a report saying that the state’s portion will be used to pay for attorney fees.
According to the report released by the Federal Trade Commission, an estimated 2,000 Western Union agents were involved in fraudulent transactions and other consumer fraud violations between 2004 and 2012. The report also said that during this period, the company knew that its agents were processing fraudulent transactions but did not take any actions.
According to the federal complaint filed by the Federal Trade Commission, the company’s money transfer system has been used by international criminals in the United States and across the world. It also stated that the system is the preferred payment method for various scams.
“Between 2004 and 2015, the company received more than 500, 000 complaints about fraudulent transfers. The total amount lost through these fraudulent activities was more than $600 million. More than 80% of the complaints in the company’s database involved the United States consumers,” the FTC said.
The commission also said that the average consumer fraud loss in company’s complaint database was around $1,200, almost three times the amount the company processed between 2010 and 2014. The company only records a fraction of fraudulent cases and the total amount of money lost through these scams amounted to billions of dollars.
The complaints spanned online dating scams, lottery prize scams, internet purchases, online adverts scams, advance fee loan scams and emergency scams. The FTC said only a few Western Union agents were involved in these suspicious activities, but the company failed to investigate or fire them.
The agents who conspired with local and international criminals allowed fraudsters to receive money without identity cards or using fake IDs. In some cases, the company’s agent locations recorded different identity cards for the same recipient or the same identity cards for multiple recipients.
In other fraudulent cases, money transfers records show fake birth dates or no birth dates at all for the fraudster receiving the cash.
Keyword: North Carolina gets a share of Western Union fraud settlement.