A remission fund set up by Western Union to compensate the victims of money transfer scams that the business “turned a blind eye to” has made its first distribution payment.
On Tuesday the Western Union Remission Fund began paying approximately $153m in funds forfeited to the US government to over 109,000 victims located around the world.
Western Union entered into a deferred prosecution agreement (DPA) with the United States in 2017 in which the business acknowledged violating the Bank Secrecy Act and aiding and abetting wire fraud. Under the terms of the DPA, Western Union agreed to forfeit a total of $586m, which will be used to compensate victims of fraudulent transactions that were knowingly processed by the company.
“Western Union turned a blind eye to the fraudulent payments made through its money transfer system,” said Andrew Smith, director of the Federal Trade Commission’s Bureau of Consumer Protection.
“We’re glad to be returning money to those consumers who were ripped off by fraudsters exploiting the Western Union system, and we will not tolerate Western Union or other payments companies facilitating fraud.”
According to the US Department of Justice, victims were enticed into sending money to criminals through Western Union by the deployment of three main types of scam.
The first scam involved conning people into paying fees, sometimes in multiple installments, to claim fictitious lottery or sweepstake winnings.
Elderly victims were targeted with grandparent scams in which criminals would pretend to be a grandchild in desperate need of money to avoid personal harm or to pay for vital medical expenses.
The third scam lured victims into parting with their cash with the promise of romance, often preying on seniors who were seeking companionship on the internet. Victims were lulled into believing that their online love interest needed funds for a visit to the United States or some other purpose.
A Department of Justice spokesperson said: “Certain owners, operators or employees of Western Union agent locations were complicit in the schemes. Western Union aided and abetted the fraud scheme by failing to suspend or terminate complicit agents and by allowing them to continue to process fraud-induced monetary transactions.”
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