News article: Ganging up on Western Union
phoenix80 November 20th, 2005
Ganging up on Western Union |
Denver Rocky Mountain News ^ | November 20, 2005 | Editorial
Western Union, a subsidiary of First Data Corp. of Greenwood Village, is a messenger that has agreed to be shot. That's a pity.
Under pressure from the attorneys general of 47 states, including Colorado's John Suthers, Western Union signed a pact Monday in which it consented to pay $8.1 million to a "consumer awareness program" as part of an effort to reduce the number of wire transfers generated by fraudulent telemarketers.
Western Union was never charged with a crime, and the agreement is not even called a "settlement," the term usually used when a company under threat of a lawsuit promises to no longer do what it never admitted to doing in the first place.
The AGs from every state but California, Florida and Pennsylvania were in on the deal. As part of the agreement Western Union also agreed to pay $400,000 to the 10 states whose AGs led the negotiations. Colorado is not among them.
What inspired this nonprosecution was the fact that telemarketers, usually from Canada and other foreign nations, try to induce suckers, often seniors, to play the "lottery" scam. They'll tell the victim he's won a large amount of money, but to prove good faith, or to pay the taxes, he must first forward a certain amount of cash by wire transfer.
Most 12-year-olds wouldn't fall for that, but some adults let their greed get the better of their brains.
It's hard work to track down the telemarketers, so the AGs turned to the next obvious target: the messenger. Western Union is easy to find, and it has deep pockets.
It took almost two years to reach the agreement. Finally Western Union agreed to "enhance" its consumer education programs by expanding fraud warnings in English and Spanish; increase its notification of fraudulent transactions to law enforcement, and reimburse the principal and transfer fees in cases where a consumer asks that a transfer be stopped prior to pickup.
Nothing wrong with that. In fact Western Union had already been doing consumer education. Corporations don't relish being used by crooks. That hurts their reputation, and ultimately their business.
But the company also agreed to pay $8.1 million over five years to so-called "peer counseling" programs overseen by the AARP Foundation. Presumably that means telling old folks not to be stupid with their money. The program amounts to a holdup in which Peter, under pressure from Paul, who's packing a gun, agrees to pay Philip.
Suthers took over the case from predecessor Ken Salazar, and spokeswoman Kristen Hubbell said he had no reason to believe Western Union had violated any laws. "He didn't feel there were any grounds whatsoever to pursue this," said Hubbell, "but felt it was a good opportunity for consumer outreach and education."
Western Union tries to put the best possible face on the deal, claiming it was entirely voluntary. A spokesman said it recently reached a similar agreement with Scotland Yard in the United Kingdom.
But when you're encircled by 47 attorneys general, "voluntary" is not the word that comes to mind.
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