Online Fraud Detection on Western Union settlement highlights risk of wire transfer scams
The median loss on frauds involving money transfers was $ 600 last year , twice as much as 2015 , according to fraud . org .
Around 39,000 Texans will receive restitution for wire fraud scams involving Western Union in a $ 586 million settlement announced by the U . S . Department of Justice last month .
The settlement is on top of a $ 5 million settlement reached last week with Texas and 48 other states over the same issue — 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 both cases , Western Union , the largest money service business in the world , has agreed to implement an anti-fraud program that includes mandatory training of its agents on fraud-induced wire transfers , heightened anti-fraud procedures and other measures to prevent scams through its wire service .
“ 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 ,” said Texas Attorney General Ken Paxton in a statement . “ 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 .”
Paxton ’ s office said the 39,000 Texans had previously filed complaints about being victims of a fraud-induced money transfer through Western Union . The federal government will appoint a third-party settlement administrator and send notices to eligible consumers by reviewing the complaints and Western Union ’ s databases .
The Department of Justice has set up a website for victims to check on progress of restitution at https :// www . justice . gov / criminal-mlars / remission . The amount each victim receives will be based on the complaint and amount lost .
Wire transfers are still the most common form of money transfers used in scams , according to the 2016 Top Ten Scam Report compiled from complaints to the National Consumers League . Wire transfers made up 39 percent of payment methods last year , the report said .