Idaho has settled a lawsuit against Western Union over its role in wire-transfer scams that targeted Idahoans.
Western Union received more than 2,000 complaints from Idahoans about fraud-induced wire transfers between 2004 and 2015, according to Idaho Attorney General Lawrence Wasden. The complaints allege victims lost $2.4 million.
The multistate settlement requires Western Union to pay $5 million to states for their investigation costs, including $47,000 to Idaho, and to improve its anti-fraud practices, according to Wasden.
The Federal Trade Commission and the U.S. Department of Justice reached a settlement on similar allegations against Western Union earlier this month. That settlement includes $586 million in restitution. Consumers can check with the U.S. Department of Justice or Federal Trade Commission for details.
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“The grandparent scam, romance scams and the IRS scam are particularly active in Idaho right now,” Wasden said in a news release. “As part of this type of scam, the predator often asks for payment by wire transfer because it’s fast, anonymous and impossible for the consumer to recover. This settlement will help ensure Western Union institutes changes to help prevent scammers from preying on Idahoans.”
Western Union agreed to warn consumers about fraud, and to train, monitor and discipline agents.
The company responded to the settlement announcement Tuesday, saying it is “committed to protecting consumers and the integrity of our global money transfer network from abuse by bad actors.”
Western Union said that in recent years it has made changes that include hiring more employees with law enforcement and regulatory expertise, doing more consumer education and agent training, and doubling its compliance budget to about $200 million a year.
“The incidence of consumer fraud reports associated with Western Union money transfers has been extremely low — less than one-tenth of 1 percent of all consumer-to-consumer money transfer transactions during the past 10 years,” the company said. “Over the last five years, the dollar value of reported fraud in consumer-to-consumer transactions, compared with the total value of all such transactions, has dropped more than 60 percent.”