Western Union faces probe for fraud-induced money transfers

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Western Union faces probe for fraud-induced money transfers

Reuters
February 25, 2014, 4:46 pm

A Western Union branch is seen in New York July 30, 2013. REUTERS/Shannon Stapleton

(Reuters) - Money-transfer company Western Union Co is being probed by the Federal Trade Commission and a U.S. district court over fraud-induced money transfers, the company said in a regulatory filing on Monday.

The company said it received a civil investigative demand from the FTC on February 21, requesting documents related to consumer complaints regarding fraud-induced money transfers sent from or received in the United States since 2004.

Western Union also said it has received multiple subpoenas since November 25 from the U.S. attorney's office for the Middle District of Pennsylvania.

The inquiries have sought documents related to complaints made by consumers to Western Union relating to fraud-induced money transfers since January 1, 2008, as well as information about Western Union's agents, the company said in the filing.

"The government's investigation is ongoing and the company may receive additional requests for information as part of the investigation," Western Union said.

Western Union has been battling the FTC over a civil investigative demand for information about consumer complaints in December 2012. A federal judge in New York ordered the company to comply with the request last December.

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.

(Reporting by Varun Aggarwal in Bangalore; Editing by Supriya Kurane)