Western Union scam settlement deadline extended

Scam victims now have until May 31 to file to get at least some of their money back

Western Union money transfer paperwork.


GRAND RAPIDS, Mich. (WOOD) — The deadline has been extended for scam victims to apply to get some of their lost money back.

The offer is part of a $586 million settlement between the Federal Trade Commission and Western Union. The original deadline to file a claim was Feb. 12, but it was pushed back late Thursday afternoon to May 31.

THE SETTLEMENT

One of the jobs of the FTC is to investigate frauds and scams. Examples include fake sweepstakes or lotteries and calls claiming to be a family member in trouble with the law and in need of money.

“We started to notice that a lot of these scams were using Western Union in order to get the victims to pay,” Jon Miller Steiger, director of the FTC’s East Central Region office, said.

“The more we looked, the more we saw that Western Union was involved and actually they knew what was going on,” he added. “Over 10 years, Western Union has received over 500,000 complaints from victims of scams, saying that they were sending money using Western Union to the scammers.”

The FTC also says Western Union failed to take action when its own employees became involved in the schemes.

“A lot of their agents were actually involved in some of the scams and that Western Union as a company knew that. They knew that the money was being picked up by some of their agents and actually being turned directly over to scammers,” Steiger said. “It wasn’t just that they were a conduit. They were knowing participants in some of these scams.”

The settlement was reached in January 2017. In it, Western Union admitted to criminal violations including willfully failing to maintain an effective antimoney laundering program and aiding and abetting wire fraud. The agreement created a $586 million settlement fund to reimburse victims. Western Union also agreed to implement a new antifraud program.

THE PROCESS

The settlement covers people who sent money to a scammer through Western Union between Jan. 1, 2004 and Jan. 19, 2017. Claims are submitted online through the FTC website and must be submitted by May 31.

Once the deadline has passed, the FTC and Department of Justice will work to verify the claims. Those approved will get a share of the $586 million fund.

Steiger believes it is unlikely there will be enough money for full refunds. The amount each victim receives will depend on the number and amount of claims submitted and approved.

Steiger said it could be a year before victims learn how much they can expect to receive.

THE VICTIMS

Teresa Johnson spoke to Target 8 investigators in 2016 after she lost $850 in a Craigslist housing scam.

“They said that they wanted a Christian person to rent the house,” she said.

But the home in Grand Rapids’ Alger Heights neighborhood wasn’t for rent. The scammer had copied information off another website and posted the rental ad online.

Johnson sent $850 through Western Union, only to learn she and several others had been scammed.

“I said well, OK, this is the end of it. I won’t even get my money back. And it was just devastating to me,” she told Target 8.

It was a similar story for Larry Palmer, who thought he had found the perfect canine companion online. The website said her name was Molly and she was 50 percent off.

“There was two or three pictures of her and she had the cutest little expression on her face,” he told Target 8.

The Vietnam veteran sent $480 through Western Union. He was preparing to pick up the new dog at the airport when the scammers emailed him and told him he needed to send in $977 more for flight insurance. It was money Palmer just didn’t have. He was out the cash, and Target 8 later found the website where he found Molly was bogus.

But both stories have happy endings.

After Target 8 shared her story, Johnson was contacted by people who wanted to help. They made it possible for Johnson and her children move out of a motel and into a home.

A donor who wants to remain anonymous helped Palmer find a teacup Yorkie named Precious and covered the cost of the dog.

“My little companion’s been pretty close to me,” Palmer told Target 8. “We take her a lot of places.”

After learning of the settlement from Target 8, both Johnson and Palmer submitted claims. They both say they plan to give back if they get refunds.

“I would like to give something back,” Johnson said.

“I need to take care of the person who helped me get my dog,” Palmer said.

KEEPING UP WITH SCAMMERS

“If you are getting a telemarketing call, you should not be paying for anything using a wire service. That is now a hard and fast rule,” Steiger says.

As word has spread about the dangers of wire transfer services, scammers have found other ways to get money from people.

“A lot of the scammers are moving toward asking people to pay with gift cards — iTunes gift cards or other kinds of gift cards. And we want people to know that that’s also not a legitimate payment mechanism,” Steiger said.

The FTC wants people to report scams on its website so investigators can track them as trends develop. Complaints to the FTC helped them build the case against Western Union. Complaints also allow investigators to keep pace with the way scammers conduct their cons.

“We are always investigating and shutting down scammers directly. But we are also looking at how it is that they are able to do what it is that they do,” Steiger said.