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>Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 ag

by 37 10y ago

>Between 2004 and 2012, the Colorado-based company knew of fraudulent transactions but failed to take steps that would have resulted in disciplining of 2,000 agents, authorities said. So there were 2,000 Western Union employees in on this scam? That sounds like a huge number. Also, a $586m fine for a company that makes $14b a quarter? Is that stardard?

batbomb 10y ago
agents are not employees. They are just people at stores. Source: I worked at customer service at a grocery store and had to do that. There was (at the time, ~2006), no official training. The most I ever wired was about $12k to Africa for a family that was immigrating, most wires (90%) were to latin america for about ~$1-300 or emergency help to family for a few hundred as well.
guntars 10y ago
The article says that their quarterly revenue was $1.4 billion.
rayiner 10y ago
> Also, a $586m fine for a company that makes $14b a quarter? Is that standard? It could be quite fair depending on the scope of the fraud. Fines at all levels in the U.S. are roughly based on the scope of wrongful activity, not income. Two people both speeding 10 mph over the limit don't get fined different amounts based on their income.
- vincnetas 10y ago
  Actually they do in Finland. Traffic fines are proportional to income. I think same is in Sweden. https://mobile.nytimes.com/2015/04/26/world/europe/speeding-in-finland-can-cost-a-fortune-if-you-already-have-one.html https://mobile.nytimes.com/2015/04/26/world/europe/speeding-...
  - johansch 10y ago
    No, traffic fines are not proportional to income in Sweden. Fines for more serious crimes are though. https://polisen.se/en/Languages/Laws-and-Regulations/Fines/ https://polisen.se/en/Languages/Laws-and-Regulations/Fines/ *) Except DUI. That's a "more serious crime". Prison/similar and/or a fine proportional to your income.
  - the-dude 10y ago
    Switzerland
  - pc86 10y ago
    Ok. Colorado isn't in Finland.
ucy 10y ago
I worked as a teller in a partner bank. As far as the paying procedures go, the only thing I needed to check it's the recipients name. I couldn't pay a "John Doe" wire to a "Joseph Doe". I also had a customer that sent a wire to a Cuban citizen / South American resident. The payment was rejected because of some US embargo against Cuba.
- TeMPOraL 10y ago
  > As far as the paying procedures go, the only thing I needed to check it's the recipients name. I couldn't pay a "John Doe" wire to a "Joseph Doe". Reminds me of a story my SO told me once. For some reason I can't recall now her company was to get some money via Western Union. She was supposed to pick it up, but the sender refused because she had a polish character ("ł") in her surname and they believed that WU won't be able to handle such transfer. For that reason, the company had to send someone else to pick up the transfer.
  - ucy 10y ago
    The recipient name was always in "ALL-CAPS". I think they couldn't handle even ascii, maybe they use some telegraph era codepage. Also, for what I remember, you can't send a wire to a company via WU. The recipient must always be a person.
    - TeMPOraL 10y ago
      I might ask SO for the details again, but yeah - that's how I understand why they wanted a particular employee to be the recipient of the transfer.
habosa 10y ago
> Also, a $586m fine for a company that makes $14b a quarter? Is that stardard? Important to remember that fines should match the severity of the violation, not the wealth of the violator. The purpose of the fine is to discourage the behavior, so ideally the following holds: (size of fine * chance of being caught) > profit from not being caught If the above is true, rational people won't bother trying to do something illegal.
- ghurtado 10y ago
  > (size of fine * chance of being caught) > profit from not being caught But that's precisely the problem, isn't it? How can you ensure the risk is too high for the company unless you take into account its financials?
  - dpark 10y ago
    Because the question isn't whether the fine will bankrupt the company but whether the expected value of the illegal transaction is negative. Illegal transactions that lose you money are a generally bad idea regardless of whether your net worth is ten dollars or ten billion.
  - habosa 10y ago
    That's the profit part. It could be the following: * $x of fines for every $y of wire fraud * $x of fines for every individual instance of wire fraud The point is if a company that makes a billion dollars does $100k in fraud they should probably pay the same fine as a company that makes a million dollars and does $100k in fraud.
- enraged_camel 10y ago
  >>Important to remember that fines should match the severity of the violation, not the wealth of the violator. The purpose of the fine is to discourage the behavior... Most of Scandinavia determines fines based on income, because they recognize that fines that constitute pocket change don't actually act as deterrent. http://www.theatlantic.com/business/archive/2015/03/finland-home-of-the-103000-speeding-ticket/387484/ http://www.theatlantic.com/business/archive/2015/03/finland-...
emptybits 10y ago
The question to reflect on is: "What is the purpose of fines?" Answers vary by country. There are at least five classic purposes for punishment: (I'm assuming the felon is a company, not an individual for the examples) 1. Incapacitation. The company is banned or dissolved to prevent it from committing a crime again. 2. Deterrence. Other companies, seeing the punishment, will be less likely to commit a crime. 3. Restitution. The company compensates the victims. 4. Retribution. Because the company hurt society, society may now inflict harm on the company. 5. Rehabilitation. The company is required to alter its policies or practices to reduce likelihood of committing future crimes. Pick one or more of the above. :-)
Lievelingsduif 10y ago
Fun fact: in the Flanders we had a show called "Basta" in which they had fun with a Nigerian scammer. The person at the local Western Union actually warned them that it was a scam. I'm not sure if all of them would actually try to stop people from wiring money. In the end it's company police to wire the money if the client wants it tho.
tptacek 10y ago
Western Union doesn't "make" $1.4bn (not $14bn) per quarter, any more than Amazon "makes" the list price of every item they sell. WU's quarterly profits are closer to $200MM.

by 37 10y ago

batbomb 10y ago

agents are not employees. They are just people at stores. Source: I worked at customer service at a grocery store and had to do that. There was (at the time, ~2006), no official training. The most I ever wired was about $12k to Africa for a family that was immigrating, most wires (90%) were to latin america for about ~$1-300 or emergency help to family for a few hundred as well.

guntars 10y ago

The article says that their quarterly revenue was $1.4 billion.

rayiner 10y ago

> Also, a $586m fine for a company that makes $14b a quarter? Is that standard? It could be quite fair depending on the scope of the fraud. Fines at all levels in the U.S. are roughly based on the scope of wrongful activity, not income. Two people both speeding 10 mph over the limit don't get fined different amounts based on their income.

vincnetas 10y ago
Actually they do in Finland. Traffic fines are proportional to income. I think same is in Sweden. https://mobile.nytimes.com/2015/04/26/world/europe/speeding-in-finland-can-cost-a-fortune-if-you-already-have-one.html https://mobile.nytimes.com/2015/04/26/world/europe/speeding-...
- johansch 10y ago
  No, traffic fines are not proportional to income in Sweden. Fines for more serious crimes are though. https://polisen.se/en/Languages/Laws-and-Regulations/Fines/ https://polisen.se/en/Languages/Laws-and-Regulations/Fines/ *) Except DUI. That's a "more serious crime". Prison/similar and/or a fine proportional to your income.
- the-dude 10y ago
  Switzerland
- pc86 10y ago
  Ok. Colorado isn't in Finland.

ucy 10y ago

I worked as a teller in a partner bank. As far as the paying procedures go, the only thing I needed to check it's the recipients name. I couldn't pay a "John Doe" wire to a "Joseph Doe". I also had a customer that sent a wire to a Cuban citizen / South American resident. The payment was rejected because of some US embargo against Cuba.

TeMPOraL 10y ago
> As far as the paying procedures go, the only thing I needed to check it's the recipients name. I couldn't pay a "John Doe" wire to a "Joseph Doe". Reminds me of a story my SO told me once. For some reason I can't recall now her company was to get some money via Western Union. She was supposed to pick it up, but the sender refused because she had a polish character ("ł") in her surname and they believed that WU won't be able to handle such transfer. For that reason, the company had to send someone else to pick up the transfer.
- ucy 10y ago
  The recipient name was always in "ALL-CAPS". I think they couldn't handle even ascii, maybe they use some telegraph era codepage. Also, for what I remember, you can't send a wire to a company via WU. The recipient must always be a person.
  - TeMPOraL 10y ago
    I might ask SO for the details again, but yeah - that's how I understand why they wanted a particular employee to be the recipient of the transfer.

habosa 10y ago

> Also, a $586m fine for a company that makes $14b a quarter? Is that stardard? Important to remember that fines should match the severity of the violation, not the wealth of the violator. The purpose of the fine is to discourage the behavior, so ideally the following holds: (size of fine * chance of being caught) > profit from not being caught If the above is true, rational people won't bother trying to do something illegal.

ghurtado 10y ago
> (size of fine * chance of being caught) > profit from not being caught But that's precisely the problem, isn't it? How can you ensure the risk is too high for the company unless you take into account its financials?
- dpark 10y ago
  Because the question isn't whether the fine will bankrupt the company but whether the expected value of the illegal transaction is negative. Illegal transactions that lose you money are a generally bad idea regardless of whether your net worth is ten dollars or ten billion.
- habosa 10y ago
  That's the profit part. It could be the following: * $x of fines for every $y of wire fraud * $x of fines for every individual instance of wire fraud The point is if a company that makes a billion dollars does $100k in fraud they should probably pay the same fine as a company that makes a million dollars and does $100k in fraud.
enraged_camel 10y ago
>>Important to remember that fines should match the severity of the violation, not the wealth of the violator. The purpose of the fine is to discourage the behavior... Most of Scandinavia determines fines based on income, because they recognize that fines that constitute pocket change don't actually act as deterrent. http://www.theatlantic.com/business/archive/2015/03/finland-home-of-the-103000-speeding-ticket/387484/ http://www.theatlantic.com/business/archive/2015/03/finland-...

emptybits 10y ago

The question to reflect on is: "What is the purpose of fines?" Answers vary by country. There are at least five classic purposes for punishment: (I'm assuming the felon is a company, not an individual for the examples) 1. Incapacitation. The company is banned or dissolved to prevent it from committing a crime again. 2. Deterrence. Other companies, seeing the punishment, will be less likely to commit a crime. 3. Restitution. The company compensates the victims. 4. Retribution. Because the company hurt society, society may now inflict harm on the company. 5. Rehabilitation. The company is required to alter its policies or practices to reduce likelihood of committing future crimes. Pick one or more of the above. :-)

Lievelingsduif 10y ago

Fun fact: in the Flanders we had a show called "Basta" in which they had fun with a Nigerian scammer. The person at the local Western Union actually warned them that it was a scam. I'm not sure if all of them would actually try to stop people from wiring money. In the end it's company police to wire the money if the client wants it tho.

tptacek 10y ago

Western Union doesn't "make" $1.4bn (not $14bn) per quarter, any more than Amazon "makes" the list price of every item they sell. WU's quarterly profits are closer to $200MM.