Sending money to friends and loved ones is a big business. And the most trusted name in money transfers is Western Union. They operate in 200 countries worldwide with over half a million agent locations to serve their customers. With such reach, it is no wonder why they are the global leader in money transfer services.
I had the pleasure of speaking with Lee Buchmann, Director of Anti-Fraud Operations, and Claire Treacy, the Global Regulatory/ Risk Communications Lead for Western Union, to learn how they are protecting consumers from fraud and scams.
The History of Western Union
Western Union began as a telegram service 167 years ago. As consumer needs changes, Western Union evolved into the global leader in money transfer services. Even though money transfers increasingly are digital, cash to cash consumer transfers provide 85 percent of Western Union’s revenues.
Today, Western Union operates over 550,000 retail locations. That is more than all of the Starbucks and McDonald’s stores combined! Their global network processed an average of 32 transactions every second in 2017. With an average consumer-to-consumer transaction value of $300, those transactions add up to $150 billion in money transfers annually.
Even though the world is increasingly digital, there are still many consumers who need to receive payment in cash. In the United States, nearly 80% of their transactions are initiated on a mobile device. Customers can digitally send money to anyone and that person can visit a Western Union location to receive the cash they need.
Common Types of Money Transfer Fraud
Unfortunately, when money is involved, it attracts fraud and scams. And with the prevalence of social media, our personal information and connections are easy to find. Scammers use this information against us to make their scams seem realistic.
Western Union is investing heavily in technology and procedures to reduce fraud, but the most reliable way to stop fraud is through education. Here are some of the most common types of money transfer fraud scams:
The Grandma Scam targets the elderly with a call pretending to be a grandchild in trouble with the law. Often, the scammer will say that they are traveling in a foreign country and the only way out is if money is sent. The scammer takes advantage of the kindness and generosity of grandparents using request of “please don’t tell my parents.” This line reduces the ability of the target to corroborate the story with the child’s parents before sending money.
The scammer preys on friend and family’s desire to help their loved one who has a medical emergency. They pretend to be a medical professional who cannot perform the urgent procedure without upfront payment.
Lottery & Prize Scams
In this scam, the “winner” is promised a great prize, but they’ll need to pay taxes or fees in order to claim their winnings. Sometimes the scammers will actually send a fake check for a portion of the winnings, but when the target deposits the check it bounces.
Internet Purchase Scam
Always be careful when buying from websites you are unfamiliar with. In this scam, the victim purchases a product that is never received. Many of these websites are designed to look like popular websites, but the URL is different. With more people using their phones to shop online, it is harder for them to verify the URL because of the small screens on phones and tablets.
IRS Taxes Scam
The phone calls in this scam are threatening and demand immediate payment. The threat of jail time makes many victims go along with this scam to protect their freedom. The real IRS does not call to collect on taxes due nor do they demand specific types of payment be made.
This scam is particularly dangerous because it affects the victim’s bank account and their heart. The scammer pretends to be in a relationship with the victim and would love to be with them. However, the only way for them to be together is to send money. Even when this fraudulent activity is uncovered by authorities, banks, Western Union, or friends & family, the victim often defends the scammer because of the “feelings” they have for each other.
Warning Signs of Potential Fraud and Scams
In hindsight, there are many clues that a fraud was happening. The trick is being aware in the moment. The most common warning signs of potential fraud is when a scammer demands payment immediately or when they’re offering that seems too good to be true.
Urgency of Payment
If someone is demanding an urgent payment, take a step back and think about it. Most things in life do not require immediate payment. This is especially true if the person requesting payment wants the money through a method that is hard to trace.
Too Good To Be True
The old adage of “if it sounds too good to be true, it probably is” is very applicable in this situation. If someone contacts you about a contest or lottery that you won, but you don’t remember actually entering one. Similarly, if you find a product for sale at a substantial discount from a website or source that you’ve never heard of before, it may be a fake product or you may never receive it.
How is Western Union Protecting Consumers From Fraud?
Western Union is very focused on protecting consumers from fraud. They want consumers to be able to transmit money knowing that it will go to the right person for the right reasons.
System Processes & Procedures
Western Union has implemented numerous processes to limit the potential for fraud. This includes multiple warnings to customers throughout the money transfer process, regular education and training for employees and representatives, and computer analytics that highlight potential fraudulent activity.
Regular Facebook Posts
Western Union regularly promotes educational messages to followers to warn them of fraud and scam scenarios.
Twitter Chats is another way to interact with customers in real time. Western Union is able to share best practices and answer questions immediately in a live environment.
By placing targeted banner ads across websites that Western Union customers frequent, they are able to remind them of the potential for fraud and warning signs to pay attention to.
Western Union’s efforts to educate consumers happen in real life as well. They hold outreach events in local communities to reach people who prefer speaking face-to-face instead of typing on a keyboard.
Their website offers a wealth of information about fraud and scams. Western Union shares videos, Q&As, tips, and so much more.