NJ Joins Multi-State Deal Tackling Complaints Against Western Union

TRENTON, NJ–Western Union should shape up and discipline its agents who don’t adhere to mandatory protocols preventing fraudulent money transfers, indicates a program that aims to stop scammers from ripping people off.

The Garden State recently joined a multi-state legal settlement stemming from complaints against Western Union for not preventing fraudulent money transfers, according to the NJ Attorney General’s Office.

On January 31, Attorney General Christopher S. Porrino announced the deal, which resolves an investigation that New Jersey took part in, and vowed to prevent third-party con artists from receiving fraudulent money transfers from unwitting consumers using Western Union’s wire transfer service.

Deputy Attorney General Cathleen O’Donnell, of the Division of Law’s Consumer Fraud Prosecution Section, handled the Western Union matter for NJ, according to the official statement.

New Jersey, as a member of an Executive Committee spearheading the Western Union investigation, has fought to stop fraud-induced money transfers, said Porrino.

As part of the settlement, Western Union agreed to compensate member states a total of $5 million for costs related to the investigation, which means NJ may receive as much as $200,000, according to the AG’s Office.

Now that the settlement has been reached, Colorado-based Western Union also must develop, and put into action, a comprehensive anti-fraud program designed to help detect or prevent incidents where consumers who have been the victims of fraud use Western Union to wire money to scammers, said the NJ Division of Consumer Affairs.

“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,’” said Porrino.

“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 Attorney General’s office indicated that Western Union has agreed to analyze, monitor and “update in the future” certain elements related to the anti-fraud program: 

• 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 transfe
• 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

The Internet and social media have added new avenues for potential exploitation by scam artists, said Porrino.

Consumers should “watch for scams” where a con artist asks for wired money to pay for medical emergencies, car accidents, property damage, or for emergency travel needs, for instance, added Porrino.

“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, the AG’s Office also noted that Western Union “has settled claims related to fraud-induced transfers with the Federal Trade Commission and US Department of Justice (DoJ),” according to a news release.

“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 [throughout the US],” says the release.