Feds trying to find scam victims after $586M Western Union settlement

(Photo illustration by Flickr user photosteve10)

Alaskans: have you been scammed?

That’s the question federal regulators are trying to answer after a massive settlement with the company Western Union. Officials don’t know how many people may have been affected, but they’re looking for victims – and hoping to return money residents might have lost to dirty tricks.

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In a lawsuit settled last January, the money transfer company Western Union agreed to turn over $586,000,000 and admitted it had not done enough to prevent fraud. Now, the federal government wants to return that money to people who were swindled.

“If someone sent a money transfer through Western Union and they lost money to a scam, then they’re eligible to ask for their money back,” Todd Kossow, Director for the Federal Trade Commission’s Midwest region, said during a conference call on Thursday.

The period in question stretches from 2004 all the way to 2017. People across the country were targeted in an array of scams, many of them online or over the phone. Victims were told they’d won a foreign sweepstakes, but had to send money to cover a fee in order to claim their winnings. Or grandparents were contacted and told their grandchildren were in trouble abroad and needed money wired right away.

Though Western Union didn’t commit any of these frauds, in its settlement the company agreed it had failed to stop scams and prevent money laundering.

“Essentially it didn’t do enough to protect people from fraud, and it didn’t properly discipline agents that were facilitating the fraud,” Kossow said.

Nobody knows how many people fell victim during the 13-year period covered by the settlement. Scams tended to target vulnerable populations. In Alaska, there have only been a few official complaints reported, according to Assistant Attorney General Cindy Franklin of the Consumer Protection Unit, who suspects many people haven’t come forward out of confusion, embarrassment or shame over being tricked.

“The scams are specifically designed to press on fears of specific groups like the elderly, or immigrants,” Franklin said. “That opens up a whole additional shame spiral. And that’s what makes it difficult for us to know how many people this has happened to.”

People who suspect they’ve been victims of a scam that involved Western Union have until February 12, 2018 to file a claim and potentially recover some of their money. The Federal Trade Commission is asking residents to submit claims through a website they’ve set up at ftc.gov/wu.