ALBANY, N.Y. – Western Union Financial Services will post prominent warnings to customers about fraudulent telemarketers who are increasingly requiring consumers to wire money because it is harder to trace, according to an agreement Monday with 47 state attorneys general.
A two-year review after hundreds of complaints found 38 percent of transfers from the United States to Canada during 2003 were “fraudulently induced,” according to the announcement.
Western Union, part of the Denver-based First Data Corp., handled most of the transactions in hundreds of complaints and the states’ review, but wasn’t accused of any wrongdoing. When presented with evidence that consumers were defrauded by telemarketers using its wire transfer services, Western Union volunteered to work to improve consumer protection, said spokeswoman Christine Pritchard of New York state Attorney General Eliot Spitzer’s office.
Western Union agreed to pay $8.1 million toward a national consumer awareness program to reach 3 million of the most vulnerable customers. The company will also pay $400,000 to the states and put warnings on wire transfer forms.
A Western Union spokesman had no immediate comment.
The pact includes all the states but California, Florida and Pennsylvania. A Spitzer spokeswoman said they didn’t know why the other states decided not to join. In Pennsylvania, state law prohibits the attorney general from entering into this type of settlement, said Barbara Petito, spokeswoman for Pennsylvania Attorney General Tom Corbett.
Older consumers have been targeted most by the fraudulent telemarketers, which were often based in Canada and other countries, the state officials said. The scams often tricked consumers into wiring substantial amounts of money through sweepstakes, lottery, advance loan fees and other means.
Scam artists’ use of wire transfer services to fraudulently obtain money from unwitting consumers is a persistent and serious problem in New York state, especially for some of our most vulnerable residents, such as senior citizens, Spitzer said.
The agreement includes:
* Reimbursing any wire transfer and fee to any consumer who requests, before the pickup of a transfer, to stop the transfer because of fraud concerns.
* Distributing anti-fraud e-mails to Western Union agents and revising training.
* Firing any agents who assisted in fraud, and firing or suspending any agents who don’t take preventive action
* Blocking transfers between specific customers and telemarketers if fraud is suspected.
* Developing a computer system to spot likely fraud and increase anti-fraud staff.
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