Consumer News

AG Derek Schmidt: Unusual effort returns more than $3.9 million to scam victims so far

Release Date: Mar 02, 2021

TOPEKA - (March 2, 2021) – The amount of money returned to Kansans who were scammed using wire transfers over Western Union has grown to more than $3.9 million, Attorney General Derek Schmidt said today.

In November 2017, Schmidt announced a landmark legal settlement with Western Union that required the company to provide refunds to Kansans who could prove they lost money to a scam and used Western Union wire services to send money to the scammers. The settlement, which was reached by Kansas alongside other states and the federal government, resolved allegations that the company had willfully turned a blind eye to the use of its services to defraud people.

To date, the settlement has resulted in refunds of more than $3.9 million to more than 1,200 Kansans who had wired money to scammers. That figure is more than double the $1,758,988 in reported refunds by June 2018, and some claims remain to be processed.

“Our consumer protection team went the extra mile to find Kansans who had wired money to scammers and notify them of their potential eligibility for a refund through this settlement,” Schmidt said, “and that extraordinary effort has made a real difference for hundreds of scam victims.”

After the settlement was approved by the court, getting the word out to victims proved difficult because many victims had not filed complaints and therefore were unknown. To address that problem, the attorney general’s Consumer Protection Division obtained from Western Union a list of Kansans who had wired large amounts of money in recent years and mailed a personal notice to more than 25,000 people in the state, informing them of their potential eligibility for a refund.

In response to the notice, several hundred scam victims in Kansas contacted the attorney general’s office and received help filing refund claims. Many more filed claims without the attorney general’s direct assistance, bringing the total claims returned to Kansans to $3,952,222.05 as of November 11, 2020. The deadline for filing claims was May 31, 2018. Currently there is no end date announced for the program to complete the processing of claims.

Of those victims the attorney general helped with filing, 23 had lost $20,000 or more. The largest refund amount the attorney general filed for one person was $65,821. Kansans who filed claims were notified by Western Union when their claims were accepted and funds returned. It is unknown how many claims remain in process or were denied by the claims administrator.

“Most of the time, once money is wired to a scammer, that money is lost,” Schmidt said. “This rare opportunity to return so much of that money to scam victims in Kansas was gratifying. But it also is a sobering reminder just how widespread and common these scams are, so we will continue our efforts to help Kansans avoid scams and hold onto their hard-earned money.”

As part of the 2017 settlement, Western Union admitted to processing hundreds of thousands of fraudulent wire transfer transactions as part of scams including the “grandparent scam,” where a scammer poses as a family member in need of immediate financial help, or lottery scams and other schemes involving the promise of prizes or job opportunities. In each of these scenarios, the scammer directed the victim to wire money through Western Union. The settlements stated that various Western Union agents were complicit in these schemes, including receiving a cut of the scam proceeds in exchange for processing the fraudulent transaction.

More information about the attorney general's Consumer Protection Division is available at www.InYourCornerKansas.org.

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