Western Union announced on Thursday that the company will $586 million to the federal government following an investigation with the United States Department of Justice and the Federal Trade Commission following.
Western Union explained that after a previously reported investigation focusing on the company’s anti-fraud program, anti-money laundering operations, and misconduct, the company will have to pay a total of $586 million to the federal government. The money would then be used to reimburse consumers who were reported victims of fraud from 2004 to 2012.
“We share the government’s goal of protecting consumers and the integrity of our global money transfer network, and we worked hard to resolve these matters with the government, Western Union explained in a statement. “We are committed to enhancing our compliance programs to prevent illicit activity on our network and protect customers who transfer money to friends, family and businesses.”
Western Union explained that they now spend approximately $200 million every year to follow rules and regulations to prevent money laundering, and fraud.
Western Union is one of the most popular payment services in the world. Billions of dollars are transferred around the world. In fact, by 2015, the company completed over 200 million consumer transactions around the world, moving $82 billion of money between consumers.
It’s important to note that Western Union tells their consumers not to send money to people they do not know in order to avoid fraud committed by internet cybercriminals. With that being said, Western Union is still able to profit off of scams and fraudsters using the service.
Then in 2015, the Central Bank of Ireland fined Western Union €1.75m for failing to prevent money laundering and reportedly funding terrorists. Derville Rowland, Ireland’s Central Bank’s Director of Enforcement announced in a statement, that the fine reflects the company’s failure to respect anti-money laundering procedures.
“The Firm is a global market leader in the provision of payment services. I am therefore concerned that this firm failed to have in place sufficiently robust systems and procedures to train agents, to monitor and identify suspicious activity in respect of smaller transactions, and to maintain appropriate records,” she said.
Western Union’s stock closed down 3.3% on Thursday evening.