Western Union has served as a reliable method for rapidly sending money over long distances since the late 1800s. Once known for telegraphs, it currently offers services to more than 200 countries across the globe. Unfortunately, Western Union is frequently used by scammers, thanks to convenience, speed, and limited means of recovery for fraudulent transactions. According to a recent settlement, Western Union had not been doing enough to protect consumers from these scammers.
Between January 2004 and August 2015, the Federal Trade Commission (FTC) reported that Western Union received over 550,000 money transfer complaints regarding popular scamming schemes, such as fake family emergency requests, fraudulent lottery winnings, or prize awards requiring upfront fees. Internal Western Union reports raised concerns about fraud committed by their own agents, but these concerns were not properly addressed – despite warnings from both U.S. and international law enforcement agencies.
In January, Western Union reached a settlement with the FTC regarding these fraudulent transfers. Safeguards are now required, including training and monitoring of agents and blocking of money transfers to anyone that has a current fraud report. In addition, Western Union agreed to remit $586 million to consumers who had fallen prey to scammers through the use of their services.
If you were a victim of a scammer who received money from you via Western Union between January 1, 2004 and January 19, 2017, you can reclaim your funds by submitting a claim through the FTC's online claim site – but don't delay. To be eligible for a refund, you must submit your claim by May 31, 2018. If you fell for more than one scam requiring Western Union payment, you may file a claim for each incident.
Before filing, gather all the documentation regarding the scam, such as receipts, transfer send forms, and emails or other communication related to the scam. You will upload this documentation with your claim. If you have no documentation, submit your claim anyway with as much detail as you can provide, and the Department of Justice (DOJ) will attempt to verify the claim.
You must also supply your Social Security Number for identification purposes, and to demonstrate that you don't owe the federal government any money – in that case, the refund amount will be directed to cover the debt and you will receive what is left over. Since the total settlement amount is locked at $586 million, the amount of money returned depends on how much you lost and how many people file valid claims.
If you already filed a complaint with the FTC, you should be getting a claims form in the mail from Gilardi & Co., a group hired by the DOJ to process the claims. You can use the claim ID number and the PIN on the form to submit your online claim.
Unless you have additional information that wasn't included in the original claim, you will not need to resubmit documentation with the form from Gilardi & Co. If the deadline is approaching and you haven't received a form from Gilardi & Co., use the online form instead and resubmit the necessary documentation.
Be patient – because of the volume of claims, it may take up to a year to get your refund. If relevant information changes such as your address or account information, be sure that the DOJ has the correct information to direct your approved refund properly.
While it's good to see increased safeguards with Western Union, your real defense against scammers comes from preventative action. Many requests to share personal information are generated by criminals who have enough information about you to put together a plausible-looking request for more.
Learn to spot the signs of typical scams, such as payment requests only by wire transfer or questionable links embedded in emails. Given the massive data breaches in recent years, you should expect these scam requests to continue and increase in intensity. In the words of Adam Carroll, Founder and Chief Education Officer of National Financial Educators, "When the FBI and the CIA are hacked by Chinese hackers, what is safe at this point?"
If you would like to prevent identity theft, check out our credit monitoring service.