Western Union is a powerful entity in the world of global remittance. They are by far the market leader when it comes to sending money around the world. Unfortunately, the company also has to pay a hefty $60m fine to the NYDFS. According to the regulator, Western Union violated anti-money laundering laws and the New York Bank Secrecy Act. A very troublesome development, although it shouldn’t affect day-to-day operations.

Being dealt a massive fine is never a fun experience whatsoever. Unfortunately, it is something that happens on quite a regular basis. Financial institutions have a tendency of violating existing laws every now and then. In the case of Western Union, such violations have gone for over a decade. A new investigation by the NYDFS brought some very worrisome statistics to light in this regard.

Western Union Fails Regulatory Compliance Again

The company failed to implement and maintain AML compliance programs to detect and report on criminal use. This is a very big problem for companies such as Western Union. Considering how they deal with cash transactions every day, it is a prime target for criminals to launder money.. If service providers fail to conduct the necessary checks, their service facilities such practices by default. Moreover, some senior executives willfully ignored suspicious transactions throughout China. Two major problems for this popular company, to say the least.

NYDFS Superintendent Vullo comments as follows:

“Western Union executives put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud, by choosing to maintain relationships with and failing to discipline obviously suspect, but highly profitable, agents. DFS will not tolerate unlawful activity that undermines anti-money laundering laws and endangers the integrity of our financial system.”

It is not the first time this company has issues with compliance. Back in 2002, the New York State Banking Department filed similar complaints. Back then, Western Union failed to establish effective procedures to monitor agents and detect suspicious transactions. It is uncanny how such companies are still allowed to operate after such a checked history of compliance failures. For now, the company gets a slap on the wrist and will pay a $60m fine.

Header image courtesy of Shutterstoc


About Author

JP Buntinx is a 30-year old FinTech and Bitcoin enthusiast living in Belgium. His passion for finance and technology made him one of the world's leading freelance Bitcoin writers, and he is working to achieve the same level of respect in the FinTech sector.

Leave A Reply

We use cookies to give you the best online experience. By agreeing you accept the use of cookies in accordance with our cookie policy.