North Carolina Attorney General Announces Settlement with Western Union over Wire Fraud

The Tar Heel State's portion of the settlement will be $226,000

North Carolina Attorney General Announces Settlement with Western Union over Wire Fraud
Image: Pixabay
February 1, 2017

North Carolina Attorney General (AG) Josh Stein has announced that Western Union will take action to protect its customers from fraud and that North Carolina will receive $226,000 as its portion of a $5 million settlement with the company.

The Tar Heel State joined 48 other states and the District of Columbia in achieving this settlement, which culminates an investigation into schemes for defrauding consumers using Western Union's wire transfer service to send money to third parties.

"Keeping North Carolinians safe – including from scam artists out to commit fraud – is my number one priority as Attorney General," said AG Stein. "There are too many creative and believable scams that trick people every day. I'm proud to join my colleagues across the nation to require Western Union to implement anti-fraud programs to better protect people."

Consumers need to know about some of the scams that led to the settlement:

Lottery scams happen when someone gets a notice that he or she has won a large amount of money but first has to pay taxes or other fees in order to receive it. Any winnings from contests should never require up-front money.

Grandparent scams take place when a scammer calls a consumer, pretending to be his or her grandchild, and claims to urgently need money. Such criminals get family names from social media, obituaries, and other sources, so they might have a lot of information about both the people they're calling and those they're impersonating. If this happens to you, the best thing to do is to hang up and then call your loved one directly to verify that it was him or her.

In sweetheart scams, scammers start an online romantic relationship in which the victim is tricked into paying for medical emergencies, car accidents, emergency travel, etc. If you meet someone online, always be cautious about wiring money.

As well as paying $5 million to cover the states' costs and fees, the agreement requires Western Union to develop and enact a comprehensive anti-fraud program that will help detect and prevent incidents in which fraud victims use the company to wire money to criminals. The program will include:

  • Anti-fraud warnings on the send forms used to wire money
  • Mandatory and appropriate fraud training and education for all company agents
  • Enhanced anti-fraud procedures whenever necessary, such as when fraud complaints rise
  • Due diligence checks on agents who process money transfers
  • Monitoring agent activities connected to preventing fraud
  • Prompt and appropriate disciplinary action against agents who do not follow the required protocols for anti-fraud measures.

The company also settled Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) claims in January. One part of those settlements is that the company will pay $586 million into a fund administered by the DOJ to provide refunds to fraud victims.

Other states involved in this bi-partisan settlement include Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, as well as the District of Columbia.