Saturday, July 7, 2012

Western Union Scams

Any time someone asks you to send money by Western Union, chances are, it is a scam.

I wrote before about PayPal.  It is not a bad service, although the fees are very high.  How high?  Well, one of the founders can now afford to build spacecraft.  That high.

But a funny thing - when PayPal became popular, the government freaked out, claiming that it would be a conduit for money to be sent to Terrorists.   And they forced PayPal to jump through a number of hoops to prevent this from happening.

In fact, our entire banking system has been crippled by a number of regulations regarding the international transfer of money.  Try sending a wire from your bank sometime - it is damn near impossible, without giving them a set of fingerprints.

I once went to the bank to send a wire transfer, and they refused to do it, because I forgot to bring my driver's license.   Even though the manager of the bank knew me personally, they needed a driver's license.  Even though there was a photocopy of my driver's license in their files with my last wire transfer, they wouldn't do it.

The wire transfer clerk, a recent Arab immigrant wearing a hijab, no less, explained to me that they couldn't be too cautious because I might be sending money to terrorists.  Irony, no?   (I switched my business to another bank that kept all my credentials in a file, and I could wire money with a fax and a phone call.  Still a pain, but less so that being interrogated by someone who barely speaks English).

So, sending money from one person's bank account (which can be traced to an individual) to another bank account overseas (again, which has a name attached to it) is a "loophole" that needs strict regulations to be closed up.  Well, OK, I guess.

So, while the U.S. Government cranks us up to Paranoia Code Level Orange, (what ever happened to that, anyway?) over sending money overseas, they leave one huge-ass gaping hole in our financial system - a Wild West free-for-all where you can pretty much do whatever you want, legal or illegal, with no consequences whatsoever and send money anonymously anywhere in the world, irrevocably and with no way of tracing it.

And yes, I am talking about Western Union.

Almost every scam on eBay, Craigslist, or on the Internet in general, involves Western Union in some form or another.   And when you talk to the Police (as I have) they throw up their hands and say, "Well, what can we do?" - as if we are helpless to regulate a U.S. Corporation involved in the money-laundering business.

For some reason we can regulate PayPal, but not Western Union.

What does this mean for you, the consumer?  Well, never, ever use Western Union, ever.

Unless you are an illegal Mexican migrant trying to wire money home to Cuernavaca,  there really is no legitimate reason to use Western Union.

And if someone asks you to wire money by Western Union - even if you think it is someone  you know, chances are, it is a fraud.

THE PROBLEM IS THIS:  Once you wire money via Western Union, it is gone, gone, gone, for good.  You can never get it back, ever, ever, EVER!   And no, there is no secret "code" that the recipient needs to get the money.  That is a lie they use to get to you send money.

How many Western Union scams are there?  How many stars are in the sky?   And every day, a new scam comes up.   What do they all have in common?  Western Union.

If you want to avoid a scam, avoid Western Union, it is as simple as that.  As soon as anyone asks you to wire money via Western Union, just walk away and assume it is a scam as 99.999999% of the time you will be right.

"Well," you say, "what about that other 0.0000001% of the time?"

You really don't understand the laws of probability, do you?

Here are some Western Union scams that I am aware of.  Like I said, there are new ones cooked up every day.  Often the amounts of money can be very small - a few hundred dollars or so.  Bear in mind that $400 is a lot of money to someone in Russia or Somalia.  Moreover, multiply that by 100,000 victims, and it adds up to millions of dollars, over time.

Don't be a chump!

1. Secret Shopper Scam:  You see a website, or a Craigslist Ad, or get an e-mail saying that a company needs "secret shoppers".   Such jobs are very, very rare, and usually they do not solicit strangers for this task.  All Secret Shopper ads or promotions can be safely called as scams.   Some ask you for money for "training" - others ask you to go to Western Union.

They may send you a cashier's check and ask you to cash it - and then wire the money to someone else, as a "test" to see how the customer service at Western Union is.  The Cashier's check is fake, or course.  It bounces, days later, and you may be out thousands of dollars.  Not the bank, YOU.  And you have no recourse but to pay it.

Another gag is to ask you to pick up a wire from Western Union, then go to another branch and wire most of the money to another person, usually overseas.  You get to keep a small amount.   While you may not lose money this way, you are acting as a mule for the Russian Mafia, Al Qaeda, or whatever.
Money laundering, what's not to like?  Except jail, of course.

2.  Lost Tourist:  You get an e-mail from someone you know, or sort of know.  They are in Europe on a short "break" (a term foreigners use for "vacation" - a tip-off right there) and have lost their wallet, or are under arrest, or whatever.  They can't contact their family for some reason (too embarrassed, phone broken, whatever) and cannot contact their bank.  They need money right away!  Can you please wire them $500?

So you do, and think you are being a good Samaritan.  On the way back from the Western Union office, you stop for gas and see the "Lost Tourist" filling his car up.  What gives?

Well, of course he wasn't lost.  Someone hacked his e-mail account and sent a broadcast message to everyone on his contacts list.   And you bit on it.  And somewhere in Europe (London is a usual target, home of many Muslim Terrorists) you've made someone very, very happy.  You may have helped fund terrorism!

Smart Move!

3. Car Scam:  You see a really nice car that is worth $10,000, for sale for $5,000.  You e-mail them, and for some reason, they take two days to respond (always).   They make the pitch - the car is an estate sale or they just want to "get rid of it quickly" because of some story (Being deployed to Afghanistan, the latest gag).   If you can wire them a $500 deposit - or even the whole $5000, they can hold the car for you.

They will claim you can put a secret "code" on the wire transfer, so if you are not happy with the car, they cannot claim the money, unless you send this "code".   There is no such "code" - at least not that Western Union recognizes.  The recipient can pick up the money, period.

(Think about it, if there was some "secret code" you could just wire the money, get the car and never send them the code!  Why no just agree to wire the money when the car is received? Same difference.  But secret codes sound so much more intriguing to the plebes).

Of course, there is no car.   The person posting the ad doesn't live in America, like they claimed, but lives overseas and just "scraped" the photo from some other car ad site.   You send the money, you never hear from them again.

4. Puppy Scam:  Same deal as the car scam, but with designer dogs.  A $1500 to $2500 purebred puppy is for sale!  But the pitch is, they are getting out of the business or some such nonsense, and will send you the dog for FREE, if you will pay for the shipping (via airline).  Just go to Western Union and wire them $450, please!

Again, there is no dog, just a photo of someone's pet they put in the ad.  And they live overseas.  They might use a "mule" to collect your wire, in Cleburne, Texas, and then re-wire it to the Russian Mafia from a Western Union in nearby Mineral Wells, Texas.   You are out $450 and the Police cannot catch these people.  I know this, as I have talked to them.

5.  Certified Check Scam:  See #1 above.  The con artist sends you a certified check.  The context for this could be varied.  For example, it could be for the "Secret Shopper" scam outlined above, or if you are selling your car.

In the car scam, they send you a cashier's check for more than the sales price, and then ask you to wire the money via Western Union to a third party, ostensibly for shipping or some other reason.

Again, the money you wire is gone right away.  The cashier's check bounces and you now owe the bank thousands of dollars.

The list goes on and on.  The common denominator?  Western Union.

So, one way to avoid these scams is to just walk away when you hear the words "Western Union".
You would think, wouldn't you, that Western Union would realize that their business is being used to propagate these sorts of scams, and take some measures to prevent them.   But they don't.   Legitimate or Scam, Western Union makes money either way - and is never liable for the consequences.

You would also think that the government, after giving PayPal and our Banks such a hard time about wiring money overseas, would close this loophole in our financial system.   You might as well put a sign over every Western Union saying, "Terrorists and Criminals Welcome Here!"

But alas, we cannot rely on the government to protect us from criminals (although that is supposed to be one of the primary functions of government, right?  Today, more than ever, "criminals" are being defined more as people who oppose the government, rather than people who try to victimize its citizens).

What we can rely upon, however, is our own common sense.  If you hear the words "Western Union" just assume you are being conned.

Because you are.