Michigan Gets Share Of Western Union Fraud Settlement

LANSING (WWJ) – Attorney General Bill Scheutte says consumers in Michigan could be eligible for $85,522 in refunds as part of a settlement involving Western Union.

In a news release, Scheutte says Western Union has agreed to pay a total of $5 million to 49 states plus the District of Columbia to cover costs and fees. That’s in in addition to a settlement announced earlier in January in which the company said it will pay $586 million to compensate fraud victims who used Western Union to wire money to scam artists.

From January 2004 to August 2015, Western Union received complaints from Michigan consumers totaling over $16 million in reported losses. Scheutte says the schemes involved lottery and contest scams, grandparent scams, advance-fee loan scams, romance scams and tax scams.

“Con artists dream up all kinds of schemes to convince consumers to wire them money; an ideal payment form for scammers because it is quick, anonymous, and irretrievable,” Schuette said in a statement. “It is important for consumers to be aware of these types of scams because wiring money is like sending cash – once it’s picked up, it’s gone.”

The settlement also requires Western Union to develop and put into action a comprehensive anti-fraud program designed to help detect and prevent these types of incidents.

Consumer Restitution

In addition to this settlement with the states, Western Union also settled claims related to fraud-induced transfers with the Federal Trade Commission and U.S. Department of Justice that was announced on January 19, 2017.

As part of those related settlements, Western Union has agreed to pay $586 million to a fund that the Department of Justice will administer to provide refunds to victims of fraud-induced wire transfers nationwide, including Michigan victims.

The Department of Justice is in the process of hiring a claims administrator to manage the refund process. Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website.

How to Spot Wire Transfer Scams                   

The schemes change over time, but continue to include:

  • Lottery and Prize Scams: Consumers are told they have won a large sum of money but must first wire money to pay required taxes or fees before receiving their winnings;
  • Romance Scams: Someone poses as a love interest and then soon begins asking consumers to wire money for various reasons, such as medical emergencies, car accidents, etc.;
  • Grandparent scams: A consumer believes his or her loved one is in immediate danger and needs money right away, and countless others.

It is important to keep a few tips in mind to help consumers avoid falling victim to wire transfer scams:

  • Consumers who receive solicitations from strangers promising big winnings should toss those letters in the trash, delete the e-mail or hang up the phone.
  • Keep in mind that it’s illegal for a telemarketer to ask you to pay with a money transfer, so if a telemarketer asks you to wire money, you already know it’s a scam.
  • Consumers who meet someone online should be always be cautious about wiring money, particularly if meeting in person has never taken place.

Schuette encourages victims of unfair, misleading, or deceptive business practices to contact the Department’s Consumer Protection Division at 517-373-1140 or toll free at 1-877-8388.

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