Western Union Fails to Properly Investigate Fraudulent Money Transfers, Class Action Alleges

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The Western Union Company has been hit with a proposed class action in which a Pennsylvania man claims the financial services firm paid out his remittance transfer to the wrong recipient and mishandled the error resolution process.

The plaintiff in the case, a native of the Democratic Republic of the Congo (DRC), says he purchased a $1,400 Western Union money transfer on August 2, 2019 for a total price of $1,488, which included a processing fee. According to the case, the plaintiff specified that the money was to be paid to his brother in the DRC and, after finalizing the purchase, sent his brother the unique tracking number for the transfer.

When the plaintiff’s brother attempted to collect the money the next day, he was allegedly told by two different Western Union agencies that the tracking number was invalid. The plaintiff says he later discovered that the transfer had already been paid out to a fraudulent recipient posing as his brother. The payment documentation, however, contained “several facial irregularities” in that the plaintiff’s first and last name were misspelled and the amount paid included the $88 processing fee that should have been retained by Western Union, the case claims.

According to the complaint, the plaintiff reported the fraudulent payout to Western Union and included the questionable payment documentation in his request for a refund. Three days later, the defendant allegedly informed the plaintiff that Western Union had determined the money was paid to the correct recipient and was closing his claim.

The lawsuit alleges that Western Union refused to provide the plaintiff with any written confirmation that his claim existed, much less that it had been investigated and closed. In fact, the company failed to comply with “any of the error resolution procedures” set forth under the Electronic Funds Transfer Act (EFTA), the suit says.

“Instead,” the complaint states, “Western Union ignored the report of an error by [the plaintiff] and simply, in its telephonic communications with [the plaintiff] made to its call center, Western Union maintained (erroneously) that it had correctly paid the money to the designated recipient. Western Union adhered to this unfounded position in ensuing communications which failed even to explain the basis for the denial other than to assert that the transfer had been paid.”

The plaintiff claims Western Union’s policy and practice of failing to fully investigate fraud claims present “a continuing issue” for anyone who uses the firm’s remittance transfer services. The suit asks the court for an injunction compelling the defendant to comply with the EFTA’s error resolution provisions.