Western Union reaches $6.8 million settlement for victims of wire transfer fraud in KY

Western Union reaches $6.8 million settlement for victims of wire transfer fraud in KY

FRANKFORT, KY (KFVS) - Kentucky Attorney General Andy Beshear announced today that Western Union has agreed to pay an initial estimate of $6.8 million to Kentuckians who have been victims of fraud-induced wire transfers involving the company.

Much of the money will go to repay senior citizens who are particularly targeted and victimized by many of the scams that use Western Union, according to Beshear.

The agreement is part of a multi-state settlement with the company to resolve an investigation on complaints by consumers who transferred money to a fraudulent third party using the company's services.

Kentucky will receive nearly $60,000 in penalties from the settlement that will go to the state's General Fund.

The settlement, which includes 48 other states and the District of Columbia, requires Western Union to develop and put into action a comprehensive anti-fraud program with the goal to help detect and prevent future fraudulent incidents by scammers.

"Today's announcement gives a little bit of justice to the thousands of Kentuckians who have been ripped off by scammers," Beshear said. "Over the last year, my office has seen firsthand the growing number of scams confronting our citizens, especially our seniors, and how these criminal scam artists are adept at creating schemes to convince Kentuckians to wire them money."

Nationally, more than three million consumers were conned out of $765 million in 2015.

Seniors lose an estimated $37 billion a year to elder financial abuse.

One example of fraud-induced wire transfers is when con artists contacting victims posing as family members in need. Another example is the promising of prizes or job opportunities. The con artists direct a victim to send money through Western Union to help a relative or to claim a prize.

Beshear is collaborating with Kroger and the USPS on an awareness campaign to help prevent more victims from being scammed.

To better protect against elder financial abuse, Beshear created an office of senior protection in the Office of the Attorney General to focus on helping seniors avoid being scammed. The office received more than 2,600 complaints and returned over $583,000 in restitution.

Beshear also launched Scam Alerts – the state's first direct messaging service that notifies Kentuckians when con artists are on the attack. Kentuckians may sign up for Scam Alerts by texting KYOAG Scam to GOV311 (468311). Or, enroll online by clicking here and selecting text message or email alerts.

The estimated $6.8 million Kentuckians will receive in relief is part of a $586 million settlement between Western Union and the United States Department of Justice and the Federal Trade Commission.

The Department of Justice will administer the fund to provide refunds to victims of fraud induced wire transfers nationwide. Kentuckians may use the following resources on this settlement: 
•         The Federal Trade Commission's announcement of settlement. 
•         The Department of Justice's website for Kentuckians who may have a claim or need for more information. 
The Department of Justice is in the process of hiring a claims administrator to manage relief for victims of this settlement. Kentuckians should continue to check the department's website for updates on the relief process, details on victim eligibility and instructions on filing a relief petition in this matter, Beshear said.

The anti-fraud program, which Western Union has agreed to evaluate and update as warranted, includes the following elements:
•         Anti-fraud warnings on send forms that consumers use to wire money;
•         Mandatory and appropriate training and education for Western Union's agents about fraud-induced wire transfers; 
•         Heightened anti-fraud procedures when warranted by circumstances such as increased fraud complaints;
•         Due diligence checks on Western Union agents who process money transfers;
•         Monitoring of Western Union agent activity related to prevention of fraud-induced money transfers;
•         Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measure. 

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