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Thought Leadership | May 3rd, 2012

Western Union Scams

Nikki Junker

western union

Scams come in many different forms, but the end result is always the same.  The goal of any scam is to take something of worth from someone using false pretensions. Most often that something is money. One popular scam is for the thief to “social engineer” a way of having a consumer wire them funds through Western Union.  There is the “grandparent” scam, the “sweetheart” scam, the “craigslist sale” scam, and many other variations of these scams.  In all of them a criminal convinces the victim that they are someone else in hopes that the unsuspecting victim will fall for their charades and fork over the dough.

The first step involves getting the victim to believe that there is a real and justified reason for him to wire the money to the thief. The victim may be led to believe that their grandson has been mugged in London, their new online love needs a kidney transplant, or that the owner of the car they are buying is out of the country.  The scam victim, with the good intention of helping those they care about, or getting a great deal on a product, goes to their bank and sends money via Western Union to their grandson, lover or salesman… who is actually a thief. The victim will undoubtedly find out within the next few days that they have been scammed and will want to get their money back.

This is when the victim becomes terribly disappointed to find that the money has already been transferred and dispersed.  Unfortunately, once the scam reaches this point, there is nothing to be done to recover the money.  The victim has lost their money, no matter how much or how little money was transferred. There is no way to get that money back.  In fact, most of the time no one would even begin to look, as the money is often transferred out of the country.  It is a devastating blow to the scam victim, leaving them feeling helpless and foolish for falling for the scammer’s lies.

How can this happen?  How can it be that when someone knows that they have been defrauded, they not only unable to get their money back, but also unable or even press criminal charges?  The technology offered by Western Union gives consumers the convenience of quickly sending money to people in faraway places.  However, this convenience is offset by decreased security.  If a person had to get on a plane and fly to London to meet someone “in person” in order to physically hand them the cash, it would often be not possible. However, that approach would be a lot more secure than wiring money to a location that they have never visited, and to an “agent” they have never met.  This “agent” will then be responsible for verifying the identity of the recipient of the funds. So the agent must now verify the identity of someone that the agent has never met before.

However, Western Union is not without security precautions.  When the money is first ordered to be sent, the sender is warned of the risks of wire transfers.  If the consumer still goes ahead with the wire transfer transaction, the agent who receives the money for distribution must verify the identity of the intended recipient with a government issued picture ID and a confirmation number.  If the transfer is international then the recipient must have the correct Money Transfer Control Number (MTCN). However, even if the recipient has all of this the agent may still refuse to dispense the funds if they believe that fraud is present. The agent will then hold the funds and file a report within the company.

So, once again the dichotomy of security and convenience comes to haunt consumers.  Unfortunately, Western Union’s system is unlikely to stop a fraudulent transaction if a thief has put the time into the crime.  The only way to stop these types of scams from happening is to educate consumers about the risks of these types of transactions and how to recognize potential scams.


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