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Western Union has also been aiding international fraud from romance scammers etc. Even though they know the sources are suspicious they still let people send la

by Kazamai 10y ago

Western Union has also been aiding international fraud from romance scammers etc. Even though they know the sources are suspicious they still let people send large amounts of money to countries like Ghana and Nigeria.

partycoder 10y ago
I do not think it is a good idea to make a blanket accusation over an entire country. Presumption of innocence, reasonable suspicion and burden of proof are core concepts of our justice systems for a reason.
- OedipusRex 10y ago
  Damned if you do, damned if you don't.
- abraae 10y ago
  But it would be perfectly reasonable - and not at odds with anyone's justice system - to set your fraud detection trigger such that: if (source.isSuspicious() && destination in ('Ghana', 'Nigeria')) { investigateFurther(); }
  - forgetsusername 10y ago
    >if (source.isSuspicious() What are the attributes of the source object that we need to determine if it's suspicious? That's the hard part.
    - johnmaguire2013 10y ago
      First time user of WU sending money to Nigeria or Ghana seems pretty reasonable to me.
      - TorKlingberg 10y ago
        Some people have family in Nigeria or Ghana, and everyone is a first time use once. The whole point of Western Union is sending money to places that don't have a solid banking system.
        kbenson 10y ago
        Asking if they are sure it's not fraud is not necessarily preventing them from using the service. People with family in those areas will presumably know based on the wording that it doesn't apply to them. A notice that the person has to acknowledge seems a fairly innocuous defense mechanism.
        jandrese 10y ago
        Even something as simple as: Have you physically met and personally know the person you are sending money to? Are they a family member? If you answered no to both of these questions STOP NOW IT IS PROBABLY A SCAM. If you wish to continue please consult with the teller.
        partycoder 10y ago
        Under that criteria, 100% of eBay transactions would be scams.
        jandrese 10y ago
        If you are buying a laptop off of eBay from Nigeria and they demand that you use Western Union to pay for it there is very close to a 100% chance that you are being scammed.
      - wheelerwj 10y ago
        First time user of WU sending more than $500 to Nigeria or Ghana seems pretty reasonable to me. Let alone thousands or tens of thousands. At the end of the day though, scammers will be scammers and victims will be victims. You can't prevent everything but you can still try harder than WU.
    - sedachv 10y ago
      I think it is valid to think in terms of expected value here, where value is negative (a loss), since there is a large volume of transactions so the law of large numbers will apply. Set a threshold of expected loss below which you will not flag transactions. Then either very large payments or relatively smaller payments to countries with a higher known percentage of fraudulent transactions will flag a transaction. You can further refine this if for example there is a relationship between observed fraud rate and transaction amount. If a company profits off of fraudulent transactions and is aware of the fraud, and the attorney general or equivalent stops viewing this as negligence, there is an incentive for the company to encourage this fraud to increase profits.
  - partycoder 10y ago
    It is as reasonable as proactively detaining everyone using tatoos or sports clothing. Correlation does not imply causation. Ethically, I do not think it is correct to outright flag an entire country. It can be used as one factor, but that in itself is not enough. Japan for example, a country that is not usually associated with crime, has one of the most profitable crime organizations in the world, the Yakuza. The UK might be where most transactions tied to money laundering are conducted, and so on so forth. In the grand scale of things, Nigerians are in a lower order of magnitude when it comes to dirty money. Fraud detection, at scale, takes not one or two but many factors in consideration. That would produce a level of confidence that will translate into a suggested action. If the confidence is high, a fraud detection system will take an action without human intervention. If the confidence is low, a human needs to intervene and take action.
    - sixo 10y ago
      It's a good bit more reasonable than arresting people.
    - adevine 10y ago
      You are confusing legal restrictions specifically set up to limit the power of the state with tools every company will use to limit fraud. For example, you speak of "presumption of innocence" and "burden of proof" as "core concepts of our justice system". These are only core concepts of our criminal justice system; our civil justice system has very different rules for burden of proof, for example. Some countries have much, much higher percentage of fraudulent transactions than other countries, and it's perfectly reasonable for Western Union to use country of origin as a factor in raising the fraud red flag. Western Union doesn't have the power to arrest anybody, and they have no reason to "presume innocence" for any one of their customers. If anything, when it comes to monetary transfers, I think it's safer to "presume guilt", that is assume all transactions have reason to be fraudulent, and then only let transactions through if you have strong reason to believe they are not fraudulent.
      - partycoder 10y ago
        The burden of proof is still on the party forwarding an accusation in civil cases. Presumption of innocence still holds in civil cases. Presumption of innocence is even in the UN universal declaration of human rights. What is considered burden of proof would be different, but it is still responsibility of the person forwarding the accusation. What you describe would be an accusation through "probable cause", described as reasonable grounds to conduct a search or investigation. That being said I think country of origin are not reasonable grounds. Could be an individual sending money home, could be a merchant, could be anything.
- Jdam 10y ago
  I'm a simple (and data driven) man, I just look at statistics, see a pattern and factor in the probability of fraud when doing Western Union money transfers to Ghana.
- handedness 10y ago
  But individuals and businesses aren't the justice system. (Something in which both sides can take comfort.) I know firsthand that some retail businesses have found much better ROI by just presuming fraud (guilt, if you want to call it that) about certain countries (Nigeria and Romania frequently wind up on that list), and working to establish bona fides if someone from one of the banned locales contacts them directly to try to work out a purchase. Which in one sense does sound horrible, but I'd imagine most personal eBay sellers would seek similar bona fides if the iPhone they're selling is purchased by someone reportedly from, say, Nigeria. It's hard to fault the risk mitigation instincts that humans have practiced for their entire history. The reason these retailers developed the policies they did is because they were manually reviewing orders and very, very few–if any–were legitimate. Visits to the street markets in said countries turned up table after table full of highly discounted, almost certainly stolen goods. That's hard to ignore when setting corporate policy. I'm not sure what the answer is, as one quickly gets into things like societal contracts, because we all pay some collective cost for the bad actors in our society, and at some point bear a non-zero degree of responsibility for not being either willing or capable of constraining those bad actors.
  - partycoder 10y ago
    Banks historically have also profited from racial profiling, and insurance companies have also profited by discriminating against women, especially in countries with paid maternity leave. Country of origin discrimination is no worse than that. I do not think those are ethical business practices, and is morally no better than scamming via e-mail.
    - handedness 10y ago
      And auto insurance companies currently profit by discriminating against males, the young, etc., all based on statistical realities. Health insurance companies charge a 20-year-old less than a 70-year-old. Nobody seems to take real ethical issue with that. If someone owns their company and doesn't want to ship to Romania, is there an ethical way for me to force the owner to do so? There isn't one that I've heard. Many just won't sell internationally, partly because of the hassle, partly because of the lack of reasonable recourse systems. Does this kind of discrimination which bothers you become OK provided it's mass discrimination? Because that, to me, breaks down really quickly in the face of scrutiny. Regardless, I take issue with your characterization of it. Deliberately trying to defraud someone is ethically the same as a good-faith effort to defend one's self against fraud? That's a moral equivalence that I think one would have a very difficult time building a system of ethics to justify.
forgetsusername 10y ago
>Even though they know the sources are suspicious they still let people send large amounts of money to countries like Ghana and Nigeria On one hand we want Bitcoin with no constraints on money transfers, on the other we want money transfer services to vet the recipient and allow or disallow the transaction. Why do we desire homogeneity in service? Let the market offer a variety and we can choose the level of "transaction safety" we desire.
- rhaps0dy 10y ago
  HN is not a hivemind though. Also Western Union could say "it's a scam, are you sure?" instead.
  - bitJericho 10y ago
    I'd bet they do already. The thing with people falling for scams is that they will refuse to the end of time to believe its a scam.
  - ensignavenger 10y ago
    I worked at a computer shop many years ago. We had a guy come in wanting us to help him send an email with his personal information (bank account, social security number, IIRC) to- a Nigerian scammer! We told him it was a scam, and he insisted it was not, he refused to listen to reason. I don't know if he ever found someone to help him or figured it out on his own or what came of it.
- jandrese 10y ago
  The advantage of Bitcoin is that it's so difficult to use, especially for large volumes of money, that the people getting scammed can't make it work. It's difficult to find someone both dumb enough to fall for a 419 scam, but smart enough to operate a bitcoin client and sign up for an exchange.
cm2187 10y ago
So have internet service providers, your email service and your laptop manufacturer...
trustfundbaby 10y ago
Ghana is pretty okay when it comes to that kind of stuff. Eastern Europe has high incidents of fraud too, but somehow that never makes the news.
notahacker 10y ago
It's difficult to "know" the source is suspicious when a fraud hotspot also receives $35 billion a year in remittance income from the same countries targeted by the fraud, and supplying a means for people to send income earned working in Western countries to various unbanked relatives and their creditors in small African towns is Western Union's raison d'etre. That doesn't mean they can't be more helpful in dealing with fraud and that no agent has ever suspected anything of any of their more regular customers, but sending a few hundred dollars to a Nigerian is a standard legitimate use case for Western Union.
- coryfklein 10y ago
  As the article points out, Western Union actually knew that some specific transactions were fraudulent, but did nothing to report or prevent them.
SeoxyS 10y ago
Honestly, if people get conned into sending money to Nigeria, why should it be anybody else's problem but theirs. Yeah, it sucks, but it's fully their fault. It's a pretty stupid thing to do and they should know better.
- DougN7 10y ago
  > and they should know better There are some really desperate and naive people in the world, and generally they're not that way by conscious choice.
- jandrese 10y ago
  The problem is when those people drain out other people's retirement accounts or do other incredibly stupid things. Plus, it is often their family that suffers. People don't exist in a vacuum.
- nommm-nommm 10y ago
  Because it has a high cost on society.
Smirnoff 10y ago
So true. I used to work closely with investigations department during my tenure at Western Union. There have been so many heartbreaking stories of people emptying their retirement accounts and sending all of their money to "lovers" from Nigeria or other non-US countries. We tried to stop these payments but they would find other ways to send cash directly. Dealing with international wires is tough. When we stopped payments and tried to protect people, the story wouldn't end there. The people would find other means to screw themselves over. That's what loneliness and desperation do to gullible people.

by Kazamai 10y ago

partycoder 10y ago

I do not think it is a good idea to make a blanket accusation over an entire country. Presumption of innocence, reasonable suspicion and burden of proof are core concepts of our justice systems for a reason.

OedipusRex 10y ago
Damned if you do, damned if you don't.
abraae 10y ago
But it would be perfectly reasonable - and not at odds with anyone's justice system - to set your fraud detection trigger such that: if (source.isSuspicious() && destination in ('Ghana', 'Nigeria')) { investigateFurther(); }
- forgetsusername 10y ago
  >if (source.isSuspicious() What are the attributes of the source object that we need to determine if it's suspicious? That's the hard part.
  - johnmaguire2013 10y ago
    First time user of WU sending money to Nigeria or Ghana seems pretty reasonable to me.
    - TorKlingberg 10y ago
      Some people have family in Nigeria or Ghana, and everyone is a first time use once. The whole point of Western Union is sending money to places that don't have a solid banking system.
      - kbenson 10y ago
        Asking if they are sure it's not fraud is not necessarily preventing them from using the service. People with family in those areas will presumably know based on the wording that it doesn't apply to them. A notice that the person has to acknowledge seems a fairly innocuous defense mechanism.
        jandrese 10y ago
        Even something as simple as: Have you physically met and personally know the person you are sending money to? Are they a family member? If you answered no to both of these questions STOP NOW IT IS PROBABLY A SCAM. If you wish to continue please consult with the teller.
        partycoder 10y ago
        Under that criteria, 100% of eBay transactions would be scams.
        jandrese 10y ago
        If you are buying a laptop off of eBay from Nigeria and they demand that you use Western Union to pay for it there is very close to a 100% chance that you are being scammed.
    - wheelerwj 10y ago
      First time user of WU sending more than $500 to Nigeria or Ghana seems pretty reasonable to me. Let alone thousands or tens of thousands. At the end of the day though, scammers will be scammers and victims will be victims. You can't prevent everything but you can still try harder than WU.
  - sedachv 10y ago
    I think it is valid to think in terms of expected value here, where value is negative (a loss), since there is a large volume of transactions so the law of large numbers will apply. Set a threshold of expected loss below which you will not flag transactions. Then either very large payments or relatively smaller payments to countries with a higher known percentage of fraudulent transactions will flag a transaction. You can further refine this if for example there is a relationship between observed fraud rate and transaction amount. If a company profits off of fraudulent transactions and is aware of the fraud, and the attorney general or equivalent stops viewing this as negligence, there is an incentive for the company to encourage this fraud to increase profits.
- partycoder 10y ago
  It is as reasonable as proactively detaining everyone using tatoos or sports clothing. Correlation does not imply causation. Ethically, I do not think it is correct to outright flag an entire country. It can be used as one factor, but that in itself is not enough. Japan for example, a country that is not usually associated with crime, has one of the most profitable crime organizations in the world, the Yakuza. The UK might be where most transactions tied to money laundering are conducted, and so on so forth. In the grand scale of things, Nigerians are in a lower order of magnitude when it comes to dirty money. Fraud detection, at scale, takes not one or two but many factors in consideration. That would produce a level of confidence that will translate into a suggested action. If the confidence is high, a fraud detection system will take an action without human intervention. If the confidence is low, a human needs to intervene and take action.
  - sixo 10y ago
    It's a good bit more reasonable than arresting people.
  - adevine 10y ago
    You are confusing legal restrictions specifically set up to limit the power of the state with tools every company will use to limit fraud. For example, you speak of "presumption of innocence" and "burden of proof" as "core concepts of our justice system". These are only core concepts of our criminal justice system; our civil justice system has very different rules for burden of proof, for example. Some countries have much, much higher percentage of fraudulent transactions than other countries, and it's perfectly reasonable for Western Union to use country of origin as a factor in raising the fraud red flag. Western Union doesn't have the power to arrest anybody, and they have no reason to "presume innocence" for any one of their customers. If anything, when it comes to monetary transfers, I think it's safer to "presume guilt", that is assume all transactions have reason to be fraudulent, and then only let transactions through if you have strong reason to believe they are not fraudulent.
    - partycoder 10y ago
      The burden of proof is still on the party forwarding an accusation in civil cases. Presumption of innocence still holds in civil cases. Presumption of innocence is even in the UN universal declaration of human rights. What is considered burden of proof would be different, but it is still responsibility of the person forwarding the accusation. What you describe would be an accusation through "probable cause", described as reasonable grounds to conduct a search or investigation. That being said I think country of origin are not reasonable grounds. Could be an individual sending money home, could be a merchant, could be anything.
Jdam 10y ago
I'm a simple (and data driven) man, I just look at statistics, see a pattern and factor in the probability of fraud when doing Western Union money transfers to Ghana.
handedness 10y ago
But individuals and businesses aren't the justice system. (Something in which both sides can take comfort.) I know firsthand that some retail businesses have found much better ROI by just presuming fraud (guilt, if you want to call it that) about certain countries (Nigeria and Romania frequently wind up on that list), and working to establish bona fides if someone from one of the banned locales contacts them directly to try to work out a purchase. Which in one sense does sound horrible, but I'd imagine most personal eBay sellers would seek similar bona fides if the iPhone they're selling is purchased by someone reportedly from, say, Nigeria. It's hard to fault the risk mitigation instincts that humans have practiced for their entire history. The reason these retailers developed the policies they did is because they were manually reviewing orders and very, very few–if any–were legitimate. Visits to the street markets in said countries turned up table after table full of highly discounted, almost certainly stolen goods. That's hard to ignore when setting corporate policy. I'm not sure what the answer is, as one quickly gets into things like societal contracts, because we all pay some collective cost for the bad actors in our society, and at some point bear a non-zero degree of responsibility for not being either willing or capable of constraining those bad actors.
- partycoder 10y ago
  Banks historically have also profited from racial profiling, and insurance companies have also profited by discriminating against women, especially in countries with paid maternity leave. Country of origin discrimination is no worse than that. I do not think those are ethical business practices, and is morally no better than scamming via e-mail.
  - handedness 10y ago
    And auto insurance companies currently profit by discriminating against males, the young, etc., all based on statistical realities. Health insurance companies charge a 20-year-old less than a 70-year-old. Nobody seems to take real ethical issue with that. If someone owns their company and doesn't want to ship to Romania, is there an ethical way for me to force the owner to do so? There isn't one that I've heard. Many just won't sell internationally, partly because of the hassle, partly because of the lack of reasonable recourse systems. Does this kind of discrimination which bothers you become OK provided it's mass discrimination? Because that, to me, breaks down really quickly in the face of scrutiny. Regardless, I take issue with your characterization of it. Deliberately trying to defraud someone is ethically the same as a good-faith effort to defend one's self against fraud? That's a moral equivalence that I think one would have a very difficult time building a system of ethics to justify.

forgetsusername 10y ago

>Even though they know the sources are suspicious they still let people send large amounts of money to countries like Ghana and Nigeria On one hand we want Bitcoin with no constraints on money transfers, on the other we want money transfer services to vet the recipient and allow or disallow the transaction. Why do we desire homogeneity in service? Let the market offer a variety and we can choose the level of "transaction safety" we desire.

rhaps0dy 10y ago
HN is not a hivemind though. Also Western Union could say "it's a scam, are you sure?" instead.
- bitJericho 10y ago
  I'd bet they do already. The thing with people falling for scams is that they will refuse to the end of time to believe its a scam.
- ensignavenger 10y ago
  I worked at a computer shop many years ago. We had a guy come in wanting us to help him send an email with his personal information (bank account, social security number, IIRC) to- a Nigerian scammer! We told him it was a scam, and he insisted it was not, he refused to listen to reason. I don't know if he ever found someone to help him or figured it out on his own or what came of it.
jandrese 10y ago
The advantage of Bitcoin is that it's so difficult to use, especially for large volumes of money, that the people getting scammed can't make it work. It's difficult to find someone both dumb enough to fall for a 419 scam, but smart enough to operate a bitcoin client and sign up for an exchange.

cm2187 10y ago

So have internet service providers, your email service and your laptop manufacturer...

trustfundbaby 10y ago

Ghana is pretty okay when it comes to that kind of stuff. Eastern Europe has high incidents of fraud too, but somehow that never makes the news.

notahacker 10y ago

It's difficult to "know" the source is suspicious when a fraud hotspot also receives $35 billion a year in remittance income from the same countries targeted by the fraud, and supplying a means for people to send income earned working in Western countries to various unbanked relatives and their creditors in small African towns is Western Union's raison d'etre. That doesn't mean they can't be more helpful in dealing with fraud and that no agent has ever suspected anything of any of their more regular customers, but sending a few hundred dollars to a Nigerian is a standard legitimate use case for Western Union.

coryfklein 10y ago
As the article points out, Western Union actually knew that some specific transactions were fraudulent, but did nothing to report or prevent them.

SeoxyS 10y ago

Honestly, if people get conned into sending money to Nigeria, why should it be anybody else's problem but theirs. Yeah, it sucks, but it's fully their fault. It's a pretty stupid thing to do and they should know better.

DougN7 10y ago
> and they should know better There are some really desperate and naive people in the world, and generally they're not that way by conscious choice.
jandrese 10y ago
The problem is when those people drain out other people's retirement accounts or do other incredibly stupid things. Plus, it is often their family that suffers. People don't exist in a vacuum.
nommm-nommm 10y ago
Because it has a high cost on society.

Smirnoff 10y ago

So true. I used to work closely with investigations department during my tenure at Western Union. There have been so many heartbreaking stories of people emptying their retirement accounts and sending all of their money to "lovers" from Nigeria or other non-US countries. We tried to stop these payments but they would find other ways to send cash directly. Dealing with international wires is tough. When we stopped payments and tried to protect people, the story wouldn't end there. The people would find other means to screw themselves over. That's what loneliness and desperation do to gullible people.