Western Union has agreed to pay $586 million to the U.S. government to pay back victims of fraud that the money transfer company failed to protect.
The government says that Western Union did not have a strong enough anti-fraud program, allowing scammers to use its money transfer services to rip off customers. In one scam, fraudsters would contact people to falsely say they won a foreign lottery and told them to send money through Western Union to retrieve their prize.
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As part of the agreement, Western Union has also agreed to implement and maintain an anti-fraud program and properly train its staff to identify potential fraud.
Shares of Englewood, Colorado-based Western Union Co. fell 4 percent to $20.96 in afternoon trading Thursday.