Texas Attorney General Ken Paxton today announced a $5 million settlement with Western Union to protect consumers from wire fraud scams. The deal, which involves 49 states and the District of Columbia, resolves an investigation into complaints by people who used Western Union’s wire transfer service to send money to third parties who were involved in schemes to defraud them.
In addition to the settlement with the states, Western Union agreed to pay $586 million to a fund that the U.S. Department of Justice will administer to provide refunds to wire fraud victims nationwide, including approximately 39,000 consumers in Texas.
“This settlement serves as a cautionary tale that scam artists are always looking for new ways to fool people into wiring them money, including schemes purportedly involving family members, romantic interests, lotteries and contests,” Attorney General Paxton said. “Western Union has agreed to establish an anti-fraud program, which should help ensure consumers can safely wire funds and avoid being ripped off by crooks.”
Anti-fraud measures Western Union agreed to in the settlement include:
Anti-fraud warnings on 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; and
Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures.
In addition to Texas, the following participated in the settlement: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.