After spotting large revenue made by money wiring services, the I-Team went undercover to see why companies that earn so much are doing so little to protect consumers from fraud.
In 2009, Western Union hauled in more than $5 billion and MoneyGram 's take was $1 billion.
"Most of the people that have this happen to them, don't talk about it, " said Mark Barone, of Fallbrook, whose father Norm Barone claimed he was ripped off in a convincing scam. "They're embarrassed.
Norm Barone, 80, said, "It plays really on your emotions, " noting how he received a call saying his grandson Justin was jailed in Canada and needed money for bail.
The group allegedly involved in the scam pretended to be the police, convincing Barone to wire $6, 000 via Western Union for Justin's bail money. However, when Mark
Barone tried to get some help for his father from Western Union, he said he didn't get any help. "They were very, very uncooperative, " he said.
The I-Team learned anyone can be scammed, and according to the FBI, all ages are susceptible. Popular scams include the lottery scam, where victims are asked to wire money to cover fees to collect their winnings; the secret shopper scam, where victims send off their own money after cashing the company's bad check; and the scam Barone fell for: the grandparents scam. Many of these cons rely on money wires.
The biggest players, Western Union and MoneyGram, have signed agreements, promising state agencies they'll aggressively prevent fraud.
The I-Team tested these companies and the fraud agreements by going undercover sending $1, 000 KGO-TV's investigative unit in San Francisco. KGO sent the I-Team $1, 000 in return. The money wires were sent again and again between San Francisco and San Diego.
In San Diego, undercover tester Frank told the clerk he had won the lotto and needed to send a money order to San Francisco to pay fees on his winnings. Frank wasn't warned that he might be getting scammed. But the MoneyGram and Western Union representatives told the I-Team they work at preventing fraud and will educate and warn consumers.
"They all say, 'It's not my responsibility, ' and I'm saying 'Yes, it is, '" said San Diego Deputy District Attorney Paul Greenwood.
In San Francisco, the undercover tester told the clerk she needed to send a money wire to San Diego as part of a secret shopper job, which is a common scam. Again, she was not warned. In San Diego, the clerks didn't suspect any scams and provided no warnings, except at a Western Union in San Ysidro where a clerk and manager told our tester, "It sounds like a scam, " said tester Frank.
"I am looking at this and I do think Western Union and MoneyGram can be doing so much more, " said Greenwood.
The Federal Trade Commission recently settled with MoneyGram for ignoring widespread fraud over its network. MoneyGram agreed to pay $18 million. In response, Willard Hart of MoneyGram's fraud prevention unit said, "We're working very hard to educate consumers about the scams; working very hard to educate our agents and their employees about the scams and we're working very hard to stop the scams from going through our network."

This is in reference to online.westernunion.com -- This website is a waste of time and money. Spent many hours trying to create a transaction that would wire $150. from my bank account in FL to another in Costa Rica. This was my 1st experience in my life wiring money and it was HORRIBLE. After submitting a lot of personal information, copy of Drivers License and Passport, all numbers of bank account and copy of statement-- and at least 5 hours on the computer over a 6 day period... what did I get for it? An agent telling me the transaction was booked backward and 32 cents was sent to Costa Rica and I have been charged a $22. service fee. I was informed that I should be happy that I wasn't charged a $35. cancellation fee. There is no excuse for charging for a service that was not delivered. If you need to send $$$ anywhere: Here is what I learned... Go to your local Supermarket or convenience store and they can wire if for you within minutes. The paperwork takes about 2 minutes and in another 5 minutes the money will be at its destination. In my case, it cost $14.99 to wire $150.

I have been attached to the OCONUS US SPEC OPS UNIT from 2008 until present. During the length of time, I have sent funds using the western union website numerous times to various locations around the world and also within the country we are based in. On a few of my transactions and my recent one, I received a message online to contact a number for validation or so that the funds can be released. For those instances, while speaking with the representatives, they have always stated my transaction cannot be processed because they are using a third party company to trace the IP address or exact location, which i think is a security issue for us based here, a waste of time and funds if western union is paying for those services, and why even partner with "Mastercard" on the final approval stage on the website. My billing information specifically state that I am deployed, I have to pass the "MASTERCARD" approval stage, and when I tell the representative I'm attached to a Spec Ops Unit in support of OEF, they say we still need to verify your location. That is completely ridiculous, you are using a third party company to accurately track or locate a US Military Unit in support of OEF, which if the location was leaked or landed in the wrong hands, could cause major problems to and for the US deployed personnel based there. I mean, all the terror threats in the media, and your representatives state we still have to accurately track your location, after I just informed them about the security issues associated with that. I think western union needs to correct that, or provide services specifically tailored to & for Personnel Deployed in support of the US interests'. It's hard enough already that we have to be away from loved ones, and then having to add the burden of trying to find a way to send funds to loved ones back home, for emergencies, or to pay for support services, etc. I greatly appreciate your time taken to read this and if there is any action taken. May you have a Happy 2010-2011 Holidays with your loved ones, while we continue to support and show love for our country.

How do I deactivate and erase, delete, or cancel my account and information associated?

I've never personally used Western Union before. So, I've just run into a situation where I needed to wire funds from the U.S. to China. I created a profile on their website and entered my bank's debit card data to get started. After attempting to complete the transaction, I received a message that stated, "your payment was declined by your bank." I then contacted my bank to find that my account and my card were in perfect working order. I attempted once more to complete the WU transaction to receive a notice that I would not be able to complete any transactions both online or by telephone and that I would need to physically go into a WU location if I wanted to send money. I thought WU may have simply had a "connectivity" issue with my bank's debit card system, so I revised my profile with my checking account information to attempt the 3-day transaction directly from the account. However, when WU's website tried to access the bank account to verify information, WU's site just timed out. I then went one step further and entered a credit card into my account and tried the transaction one last time...same result...denied. After contacting WU's customer support, all I could get out of them was that they utilize several different methods to protect consumers. However, there was no answer as to why I was denied, nor to what extent and/or how long I would continue to be denied. The rep simply informed me that I would need to seek out a physical WU location to send funds. So, here's my dilemma...why would this company advertise a service that they obviously do not offer? Why would they lead customers to believe this service exists? And finally, why the *** did I need to waste several hours of my morning entering personal account information, then speaking to customer service reps only to find out that I still must physically go into a WU location to send the funds? Nope...this sort of service (or the lack thereof) just made a lifetime impression on me. I will NEVER attempt to utilize WU again and will simply pay the few extra dollars to perform wire transfers directly with my bank. WU...STOP WASTING CONSUMER'S TIME!!!

I sent a sum of Chf 1237 (approximately USD $1260) from Switzerland, where I live, to my relative in Bamako, Mali in July 2009. The money never reached its intended recipient. There began my nightmarish experience with Western Union, one that has been dragging on for more than a year.

Western Union argued that the recipient had been identified by the person at the counter through a piece of identity which was validated with the photograph of the bearer. I have sent Western Union all the necessary evidence pointing to the contrary (for example, the number on the identity card of the intended recipient is clearly not the one on the form of receipt. In addition, the expiry date on the identity document presented does not match the date of validity of the identity card of the intended recipient) . This clearly demonstrates that the person who collected the money was not the intended recipient and also that none of the identification documents match that of the intended recipient of the funds.

Western Union claims on its website that its method is foolproof and that not only does the company verify the identity of the recipient at the time of collection of the amount but also that the recipient would need to have full knowledge of the transaction number, name of the sender, the originating country and the correct amount of funds transmitted.

This gets me very very worried.

The person who withdrew the money was aware of the transaction number, the sender name and address, and the exact amount of the transaction. This cannot be a coincidence. If Western Unions system is indeed as foolproof as they claim it is, then logic would suggest that the only entities aware of such intricate details of the nature of transaction could either be the sender, recipient or employees of Western Union who handle the transaction.

I recently read that a network operating this type of fraud in Mali have been dismantled, one of whose members is an employee of BDM, a partner agency of the Western Union in Mali.

Its been an more than year and I have been appalled by the callous attitude of the company. I have repeatedly tried to sort this out with Western Union through phone calls and letters (including one from my lawyer) but they just dont seem to care. They havent bothered to even get back to me. It is really unbecoming of a company this large and one that so many of us rely on to send money back to our loved ones. Till now, Western Union had a solid reputation built through more than a century of reliable service. I used to use it without a second thought. However, after this bitter experience, I will never use it again and will also strongly dissuade others from doing so. At this point, Western Union should do return me my money but the prospect of that happening is bleak. I hope they are reading this and will do the right thing.