Western Union coughs up $586m for turning a blind eye to fraudsters

Western Union will forfeit more than half a billion dollars after admitting it broke money laundering laws. The admission comes after America's trade watchdog, the FTC, looked into why so many fraudsters use the company's services to launder ill-gotten gains. Under the terms of the settlement, Western Union pled guilty to …

[Youngone]

Some points

- It agreed to pay back $586m

8 months profit on at least 8 years worth of cheating. They will continue doing this, they'd be mad not to.

- retrain its staff

Who were probably just following policy, so don't need to be retrained.

- and submit to three years of independent oversight.

Who will be doing that? Presumably the FTC. Will there be political meddling into this independent oversight? Let me check.

Surprisingly they've only spent $260,000 on campaign contributions in 2016, so maybe there really will be oversight.

Of course they might spend an awful lot more this year, who knows?

[Anonymous Coward]

Re: Some points

"- retrain its staff Who were probably just following policy, so don't need to be retrained."

And are even more likely paid bonuses for hitting sales targets, giving them a strong incentive to look the other way.

It's just like Wells Fargo - ignore all the warning signs and then blame the employees after you set up a system that rewards those same employees for being "creative".

[frank ly]

Re: No jail-time, just the cost of doing business

That was a well written comment. If you wrote some more you could make an entire article.

[Paratrooping Parrot]

Who gets the money?

[lglethal]

A fine is nice...

but the only thing that would actually change Western Union's behaviour would be threatening (and actually meaning it) to take away their licence to act as a financial institution and trade in the US. The loss of being able to trade in the world's largest economy, (and you would imagine Europe would follow suit pretty quickly) would destroy Western Union in a heartbeat. That IS a threat they might actually listen to...

[Anonymous Coward]

And there aren't scams only...

... actually this kind of money transfers with little or no checks is a boon to many criminal activities - including the trafficking of people.

But strangely, even in an era when for the fear of terrorism we're told we have to accept more limitations, data gathering and controls, nothing was done to check more money flows...

[Mark 65]

Are any other regions about to fine them too? EU and UK would be mad not to, it's effectively free money. Stand-over tactics would seem appropriate.

[Amos1]

Other countries fine them? But then any bribes might see the light of day.

I was at a security conference about four years ago and the FBI "senior level" executive droned on about their electronic crime efforts. During the Q&A I asked him why they went after MoneyGram and not Western Union when it was clear from all of the phishing emails that Western Union had at least as big a hand in that arena. The whole room started nodding and the dude acted like he had never heard of Western Union before.

I figured that either the feds have really good email filters so they never saw any or their secretaries were printing their email out for them.

[Alan Brown]

"I asked him why they went after MoneyGram and not Western Union"

Note that this was the FTC going after WU, not the FBI.

[John Smith 19]

So automated Smurfing

2 dozen transfers from the same account all for $9500-9999 and that's not suspicious?

[Andy Non]

Western Union have agreed to pay the fine but

require the court to provide $10 million processing fee first.

[Doctor Syntax]

No real harm done

Nobody forced to pay back their bonuses or salaries, maybe they were even promoted. No jail time or anything really bad and the shareholders pay the fine.

[Potemkine]

Useful tip.

When a mail mentions 'Western Union', I know it's a scam.

[lglethal]

Re: Useful tip.

It's on my block list! As soon as an Email mentions Western Union or Money Gram it goes straight to my Deleted Emails Folder and I never see it.

No risk involved as no one I care to know would use those dodgy Services!

PS Only 8 years of "dodgy activities"? Western Union have been the "go to guys for dodgy" since at least the early 90's!

[John Brown (no body)]

Re: Useful tip.

"PS Only 8 years of "dodgy activities"? Western Union have been the "go to guys for dodgy" since at least the early 1890's!"

FTFY.

[Anonymous Coward]

What about digital money laundering?

Bitcoin, that is.

Couldn't there be some processing unit that records all reported money launder, crypto ransom, bitcoin robberies and other illegal transactions? Businesses/everyone should abide by these black lists... Anyone about to receive such illegal funds would immediately know what they're dealing with.

Is this not feasible?

[montyburns56]

But in order to get the money the FTC will first have to pay an administration fee of $1million which will be sent to Prince Ogebeyo of Lagos.

[FozzyBear]

and the senior execs escape the possibility of jail. Good for them, retain the incentives they have earned and make the company itself pay out the fines. We wouldn't want them to downgrade to a BMW 5 series that just wouldn't be ethical.