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I'm pretty sure the real damage is at least 100x larger than that. But hey, this will allow some US authority to declare victory and their heads will get bonuse

I'm pretty sure the real damage is at least 100x larger than that. But hey, this will allow some US authority to declare victory and their heads will get bonuses/promotions. The $586M mentioned covers 8 years (2004-2012). So $73M/year. In 2015 they moved $82B. Edited: This settlement is saying the amount of money they move fraudulently is less than 0.1% of their total money movements. This seems entirely implausible. 10% seems a lot more plausible.

diogenescynic 10y ago
>I'm estimating about 30-50% of that is fraudulent. What are you basing that on?
- zymhan 10y ago
  Hey, you have to work really hard to pull that sorta stuff out of thin air.
- johansch 10y ago
  Yeah, that was a bit rushed :). I edited my comment, please re-visit it. (And yeah, it's still an estimate, since no-one except WU has any possibility of knowing the truth. Still, 0.1% seems fraud seems like an awefully low estimate, doesn't it?)
  - nickff 10y ago
    How does being rushed justify a complete an incendiary allegation based on a WAG? Do you have any basis for this allegation, or is it just an "Obama was the head of the illuminati, because, someone's gotta be heading the illuminati"-type guess? You revised it down to 10% now; why? Don't get me wrong, 10 is a great number, much better than 11, but I still don't see any rationale.
    - johansch 10y ago
      No, it was a Wild-Ass-Guess based on my instinctial knowledge of how money they are moving around yearly and how much is likely fraud. To add a perspective: They paid about a penalty for about a 1/1000th of the money they move around. What's your guesstimate for how much of WU money is based on fraudulent transfers?
      - nickff 10y ago
        My guess would be that Western Union has transferred between $0-$100 000 000 000 per year in fraudulent transfers, and I really don't know where in that range they might fall. You don't have to make a guess, and if you have no reason to do so, you should just avoid it. Opinions without reason are just feelings.
        johansch 10y ago
        You remind me a lot of that guy I used to supervise who totally refused to do any work estimates on anything, because "there was not enough data to conclusive estimate the amount work needed". There are concepts such as "experience", "pattern recognition", extrapolation etc.
        nickff 10y ago
        I can tell you that I perform $0 in fraudulent transfers, but would not then guess that 0%, 10%, 30%, or 50% of your revenue is derived from fraudulent transfers, because I don't know you or what you do.
        johansch 10y ago
        Well, thank you for demonstrating quite clearly what I just wrote.
      - scottlamb 10y ago
        The story says 2,000 agents were involved. Do you trust that number? I'll assume so through the following reasoning: I'm not sure how many agents they have, but https://corporate.westernunion.com/ https://corporate.westernunion.com/ says there are 500,000 Agent locations, so let's conservatively say there are 500,000 agents (surely there's at least one per location). That suggests (at most) 0.4% of their agents were involved. I doubt 100% of those agents' work involved aiding and abetting scammers, so less than 0.1% sounds totally believable to me. That said, I think arguing about how big the fine should be is accepting the faulty premise that a fine is an acceptable penalty. Wire fraud is a felony. I know someone who went to prison for it. The article says "[Western Union] agents were helping scammers avoid detection" and "Fraudsters [...were...] giving Western Union agents a cut in return for processing the payments". They willingly participated in felonies for personal profit. Shouldn't they—and all the supervisors who can be proven to have condoned their actions—be going to prison? Or is this okay just because everyone's doing it and they have a fancy corporation to hide behind?
- tyingq 10y ago
  Might be a bit high, but.... "For example, a seven-state survey found that approximately 29 percent of Western Union money transfers to Canada in excess of $300 were fraud-induced."[1] and "The world’s largest money-transfer company reported a 27 percent drop in fourth-quarter profit, largely due higher costs linked to tightened regulations to prevent money laundering."[2] Seems like something might be afoot there. [1]http://www.mtraweb.org/state-attorney-generals-agreement-to-curb-wire-fraud/ http://www.mtraweb.org/state-attorney-generals-agreement-to-... [2]http://www.huffingtonpost.com/2014/02/25/western-union-investigation_n_4851195.html http://www.huffingtonpost.com/2014/02/25/western-union-inves...
  - deleted 10y ago
    [deleted]
  - johansch 10y ago
    Here's another number: https://chargedaffairs.org/billion-dollar-industry-nigerian-e-mail-scams/ https://chargedaffairs.org/billion-dollar-industry-nigerian-... "a follow-up study in 2013 found that the number had jumped to $12.7 billion. This would make the 419 ‘industry’ roughly the same size as the GDP of Botswana." I believe the vast majority of this is transferred via Western Union.
- bsder 10y ago
  http://www.statisticbrain.com/credit-card-fraud-statistics/ http://www.statisticbrain.com/credit-card-fraud-statistics/ > Percent of Americans who have been victims of credit card fraud--10% 0.1% seems very low. I suspect that companies wouldn't even bother with compliance departments if it were actually that low. Interviews with Ebay execs suggest rates closer to the 3-5% range, and it takes a lot of work to keep it that low. 30% is probably high. But probably not by a huge amount.
deleted 10y ago
[deleted]
zymhan 10y ago
So you're just going to pull numbers out of your ass and not provide a single link to back up your claims? I can make up numbers too! Western Union fraud is actually 1035% of all of their transactions. Seriously.
- colejohnson66 10y ago
  Well, there's a difference between fake numbers under 100% and fake numbers over 100%. Surely anyone would know you're lying when you use a figure over 100%, but maybe I'm putting too much faith in the general public.
  - zymhan 10y ago
    I was using hyperbole to illustrate my point. I was worried someone might believe me if I made up a number under 100.
erroneousfunk 10y ago
Western Union is VERY commonly used for immigrants to send money out of the US to family abroad. Just because you never use it, and only hear about it in the context of scamming doesn't mean that's how the whole world works. One of the commenters here also suggested preventing large money transfers to countries like Ghana and Nigeria. That would be terrible for Ghanaian and Nigerian immigrants with family back in the country, depending on their support. It's a cheap and reliable way to send money to people that doesn't rely on both parties having bank accounts. My husband works with Ghanaian immigrants who frequently use Western Union to send money back home, just as a personal note.
- protomyth 10y ago
  Heck, Western Union used to be very common for poor folks to send money to their relatives in the US too. It has largely been replaced by Walmart-to-Walmart since that is cheaper. https://www.walmart.com/cp/walmart-money-center/5433?povid=GlobalFooterMoneyCenter https://www.walmart.com/cp/walmart-money-center/5433?povid=G...
  - Turing_Machine 10y ago
    Yeah, Walmart is certainly one of the cheapest. I speculate that Walmart thinks it's good business to make a minimal profit on the money transaction because a substantial portion of the money winds up being spent in the Walmart store where it's received.
    - protomyth 10y ago
      You are probably correct, but I get the feeling the volume involved and low cost to Walmart probably have an affect.
    - nommm-nommm 10y ago
      In retail this is called a loss leader. However, the low overhead of the service probably contributes to the lower cost as well. This isn't their main business and Walmart already have TONS of locations, they don't have to pay rent or commission on physical locations nor do they have to pay for labor, the employees would be there anyways. It doesn't cost them hardly anything to add this service to their main business.

diogenescynic 10y ago

>I'm estimating about 30-50% of that is fraudulent. What are you basing that on?

zymhan 10y ago
Hey, you have to work really hard to pull that sorta stuff out of thin air.
johansch 10y ago
Yeah, that was a bit rushed :). I edited my comment, please re-visit it. (And yeah, it's still an estimate, since no-one except WU has any possibility of knowing the truth. Still, 0.1% seems fraud seems like an awefully low estimate, doesn't it?)
- nickff 10y ago
  How does being rushed justify a complete an incendiary allegation based on a WAG? Do you have any basis for this allegation, or is it just an "Obama was the head of the illuminati, because, someone's gotta be heading the illuminati"-type guess? You revised it down to 10% now; why? Don't get me wrong, 10 is a great number, much better than 11, but I still don't see any rationale.
  - johansch 10y ago
    No, it was a Wild-Ass-Guess based on my instinctial knowledge of how money they are moving around yearly and how much is likely fraud. To add a perspective: They paid about a penalty for about a 1/1000th of the money they move around. What's your guesstimate for how much of WU money is based on fraudulent transfers?
    - nickff 10y ago
      My guess would be that Western Union has transferred between $0-$100 000 000 000 per year in fraudulent transfers, and I really don't know where in that range they might fall. You don't have to make a guess, and if you have no reason to do so, you should just avoid it. Opinions without reason are just feelings.
      - johansch 10y ago
        You remind me a lot of that guy I used to supervise who totally refused to do any work estimates on anything, because "there was not enough data to conclusive estimate the amount work needed". There are concepts such as "experience", "pattern recognition", extrapolation etc.
        nickff 10y ago
        I can tell you that I perform $0 in fraudulent transfers, but would not then guess that 0%, 10%, 30%, or 50% of your revenue is derived from fraudulent transfers, because I don't know you or what you do.
        johansch 10y ago
        Well, thank you for demonstrating quite clearly what I just wrote.
    - scottlamb 10y ago
      The story says 2,000 agents were involved. Do you trust that number? I'll assume so through the following reasoning: I'm not sure how many agents they have, but https://corporate.westernunion.com/ https://corporate.westernunion.com/ says there are 500,000 Agent locations, so let's conservatively say there are 500,000 agents (surely there's at least one per location). That suggests (at most) 0.4% of their agents were involved. I doubt 100% of those agents' work involved aiding and abetting scammers, so less than 0.1% sounds totally believable to me. That said, I think arguing about how big the fine should be is accepting the faulty premise that a fine is an acceptable penalty. Wire fraud is a felony. I know someone who went to prison for it. The article says "[Western Union] agents were helping scammers avoid detection" and "Fraudsters [...were...] giving Western Union agents a cut in return for processing the payments". They willingly participated in felonies for personal profit. Shouldn't they—and all the supervisors who can be proven to have condoned their actions—be going to prison? Or is this okay just because everyone's doing it and they have a fancy corporation to hide behind?
tyingq 10y ago
Might be a bit high, but.... "For example, a seven-state survey found that approximately 29 percent of Western Union money transfers to Canada in excess of $300 were fraud-induced."[1] and "The world’s largest money-transfer company reported a 27 percent drop in fourth-quarter profit, largely due higher costs linked to tightened regulations to prevent money laundering."[2] Seems like something might be afoot there. [1]http://www.mtraweb.org/state-attorney-generals-agreement-to-curb-wire-fraud/ http://www.mtraweb.org/state-attorney-generals-agreement-to-... [2]http://www.huffingtonpost.com/2014/02/25/western-union-investigation_n_4851195.html http://www.huffingtonpost.com/2014/02/25/western-union-inves...
- deleted 10y ago
  [deleted]
- johansch 10y ago
  Here's another number: https://chargedaffairs.org/billion-dollar-industry-nigerian-e-mail-scams/ https://chargedaffairs.org/billion-dollar-industry-nigerian-... "a follow-up study in 2013 found that the number had jumped to $12.7 billion. This would make the 419 ‘industry’ roughly the same size as the GDP of Botswana." I believe the vast majority of this is transferred via Western Union.
bsder 10y ago
http://www.statisticbrain.com/credit-card-fraud-statistics/ http://www.statisticbrain.com/credit-card-fraud-statistics/ > Percent of Americans who have been victims of credit card fraud--10% 0.1% seems very low. I suspect that companies wouldn't even bother with compliance departments if it were actually that low. Interviews with Ebay execs suggest rates closer to the 3-5% range, and it takes a lot of work to keep it that low. 30% is probably high. But probably not by a huge amount.

deleted 10y ago

[deleted]

zymhan 10y ago

So you're just going to pull numbers out of your ass and not provide a single link to back up your claims? I can make up numbers too! Western Union fraud is actually 1035% of all of their transactions. Seriously.

colejohnson66 10y ago
Well, there's a difference between fake numbers under 100% and fake numbers over 100%. Surely anyone would know you're lying when you use a figure over 100%, but maybe I'm putting too much faith in the general public.
- zymhan 10y ago
  I was using hyperbole to illustrate my point. I was worried someone might believe me if I made up a number under 100.

erroneousfunk 10y ago

Western Union is VERY commonly used for immigrants to send money out of the US to family abroad. Just because you never use it, and only hear about it in the context of scamming doesn't mean that's how the whole world works. One of the commenters here also suggested preventing large money transfers to countries like Ghana and Nigeria. That would be terrible for Ghanaian and Nigerian immigrants with family back in the country, depending on their support. It's a cheap and reliable way to send money to people that doesn't rely on both parties having bank accounts. My husband works with Ghanaian immigrants who frequently use Western Union to send money back home, just as a personal note.

protomyth 10y ago
Heck, Western Union used to be very common for poor folks to send money to their relatives in the US too. It has largely been replaced by Walmart-to-Walmart since that is cheaper. https://www.walmart.com/cp/walmart-money-center/5433?povid=GlobalFooterMoneyCenter https://www.walmart.com/cp/walmart-money-center/5433?povid=G...
- Turing_Machine 10y ago
  Yeah, Walmart is certainly one of the cheapest. I speculate that Walmart thinks it's good business to make a minimal profit on the money transaction because a substantial portion of the money winds up being spent in the Walmart store where it's received.
  - protomyth 10y ago
    You are probably correct, but I get the feeling the volume involved and low cost to Walmart probably have an affect.
  - nommm-nommm 10y ago
    In retail this is called a loss leader. However, the low overhead of the service probably contributes to the lower cost as well. This isn't their main business and Walmart already have TONS of locations, they don't have to pay rent or commission on physical locations nor do they have to pay for labor, the employees would be there anyways. It doesn't cost them hardly anything to add this service to their main business.