Fraud Case Study 18 - Western Union payment Fraud

Case Description:

I'm trying to do a deal with a supplier. I have told him I won't pay until I receive the goods. I can understand that he won't send the goods without payment because he could be afraid I will take the goods and refuse to pay. Therefore, he has come up with an idea.

I pay for the goods using Western Union and enter his address but use someone else's name (e.g. one of my friends or family members). He will then send the goods as I obviously have the required amount of money. When I receive the goods, I can change the name on the Western Union payment form to his name so he can collect the money.

Will this make the transaction safer?

Analysis of this case:

1. Money transfer services, such as Western Union, are fast, easy and convenient ways to send funds to people you know. They are not designed to be a payment method for doing business with a stranger. If you don't know the person you are sending money to, this payment method is the same as sending a cheque to someone. They can cash it anywhere without restrictions.

2. Be cautious if a supplier tells you that they will only accept money transfer as their payment method. Most legitimate sellers will accept more than one form of payment. Be suspicious if a supplier tells you how to "safeguard" your purchase by putting the name of a friend or loved one on the money transfer documents. Also be careful if they ask you to establish a "test question." Changing the name or adding a test questions will not protect you from a fraudulent seller.

3. Anyone can pick up the payment whenever they show either

a) proper identification or

b) a money transfer number (MTCN).

All a fraudster has to do is complete the "To Receive Money" form and give it to the Agent with their ID card or the correct MTCN. The agent will give them a receipt. When they sign the receipt, they can take the money without a problem.

4. Western Union does not offer an escrow service or any type of "purchase protection." In other words, once you send your money, there is no way to get it back. Remember, Western Union is a service typically used to send money between two parties that know each other.