This is an archived article that was published on sltrib.com in 2017, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah officials have signed on to a $5M multi-state settlement with Western Union resolving a national investigation into complaints by consumers who used the company's wire transfer service to send money to third parties involved in fraudulent schemes.

The settlement agreement was signed by Utah along with 48 other states and the District of Columbia, according to a Friday news release from the Utah Department of Commerce.

In a separate but related court case, Western Union settled with the Federal Trade Commission and U.S. Department of Justice for $586M over claims related to fraud-induced transfers. According to data obtained from Western Union, 3,790 Utah consumers filed complaints alleging over $4.6M in fraudulent wire transfers from Jan. 1, 2004 through Aug. 30, 2015. Those Utah consumers and others may be eligible for restitution through the $586M settlement fund with the justice department, the news release said.

"Consumer scams using money wire transfers have been targeting Utah citizens for years with no hope for refunds," Utah Department of Commerce Executive Director Francine Giani said in the news release. "These Western Union settlement agreements are great news for Utah consumers who lost their hard earned money to fraudulent schemes where there was no viable recourse."

Some of the common scams involving wire transfers are: lottery and contest scams in which consumers are told they have won a large sum of money but must first wire money to pay required taxes or fees before receiving their winnings, grandparent scams in which a consumer believes his or her loved one is in immediate danger and needs money right away, and romance scams in which someone poses as a love interest and then soon begins asking consumers to send money for various reasons, such as medical emergencies, car accidents, muggings, emergency travel, etc., the news release said.

Western Union said in a statement: "We share the goals of the attorneys general and are committed to protecting consumers and the integrity of our global money transfer network from abuse by bad actors. That's why we have significantly enhanced our compliance program in recent years by adding more employees with law enforcement and regulatory expertise, strengthening our consumer education and agent training, bolstering our technology-driven controls and having our Chief Compliance Officer report directly to the Compliance Committee of the Board of Directors.

"Over the past five years, we have increased overall compliance funding by more than 200 percent and now spend approximately $200 million per year on compliance, with more than 20 percent of our workforce dedicated to compliance functions. The incidence of consumer fraud reports associated with Western Union money transfers has been extremely low — less than one-tenth of 1 percent of all consumer-to-consumer money transfer transactions during the past 10 years. Over the last five years, the dollar value of reported fraud in consumer-to-consumer transactions, compared with the total value of all such transactions, has dropped more than 60 percent."

Utah Consumer Protection Division Director Daniel O'Bannon stated in the news release, "In addition to paying Utah consumers for lost funds, Western Union pledged to tighten money transfer controls which will help protect the public at large from future fraud."

The FTC $586M settlement requires Western Union to develop an anti-fraud program designed to help detect and prevent scams.

The anti-fraud program includes the following elements:

— Anti-fraud warnings on send forms that consumers use to wire money;

— Mandatory and appropriate training and education for Western Union's agents about fraud-induced wire transfers;

— Heightened anti-fraud procedures when warranted by circumstances such as increased fraud complaints;

— Due diligence checks on Western Union agents who process money transfers;

— Monitoring of Western Union agent activity related to prevention of fraud-induced money transfers;

— Prompt and appropriate disciplinary action against Western Union agents who fail to follow required protocols concerning anti-fraud measures.

Consumers can find information about the Western Union restitution at: https://www.justice.gov/criminal-mlars/remission