Western Union Scams

How They Work, How to Avoid Them

Money Transfer Van
••• Peter Ptschelinzew/Lonely Planet Images/Getty Images

The thought of losing money in a scam is scary but it’s a reality. Every day, people get ripped off online. Although Western Union is a legitimate business that provides valuable services, it is also a favorite tool of online thieves.

There are two key facts you should know about transferring money with Western Union.

  1. When you transfer money using Western Union, the recipient can walk into any Western Union office, get cash, and leave. At that point, the money is gone, and there’s no way to reverse or cancel the payment.
  2. In many cases, there’s no way to find out who received the money. You might have specified a recipient, and the agent might even require identification, but it’s relatively easy for thieves to get around those rules.

With this in mind, you should only use Western Union to send money to somebody you know because once you're scammed, your money will be gone for good. Armed with that knowledge, you need to decide if it’s worth the risk. And, even if you have worked with the recipient before, money transfer job scams abound.

Typical Scams

The most common scams involve somebody who wants to buy what you’re selling online. The buyer might send a payment to you, and then ask that you wire money back or send funds by Western Union.

In those situations, there’s a good chance you’re being taken for a ride. How do they convince you to send money back? Con artists are surprisingly good at what they do and have the ability to persuade even savvy people to send them money.

Red flags of popular scams include:

  • A buyer sends you extra money (more than the purchase price) to cover shipping costs, especially for expensive-to-ship items.
  • Somebody from out of town was planning to rent your apartment, but things fell through, and they want the security deposit back.
  • Your buyer accidentally got a cashier’s check for the wrong amount, but they trust you to send back any excess.

In addition to scams that ask you to refund money, thieves can also take your money by selling items online, demanding payment by Western Union or MoneyGram, and not sending the items.

What If I Already Got Paid?

You might wonder how it’s possible to lose money if you already received a payment from your buyer. Unfortunately, money does not move through the banking system as fast as you might expect—unless you use a traditional wire transfer.

If you receive a check—even an “official” check or a cashier’s check—the check might bounce several weeks after you deposit it. However, your bank will add the funds to your account balance and allow you to withdraw the money as if the check was good. But you are ultimately responsible for all deposits. Therefore, if the check bounces after you withdraw the cash, you’ll have to replace those funds.

The same holds true for electronic payments. A scammer might send money to your PayPal or Venmo account, and you might think all is well, but those charges can be reversed. The sender could have used a stolen credit card or a hacked account, or they might simply dispute the transaction. Either way, you won’t find out about it until after you’ve sent the scammer good money—which can’t be recovered.

How Do They Get Away With It?

You might think nobody could get away with these scams, given your own experiences with the financial system. It’s reasonable to assume that the police can easily find the thief using information from the bank accounts used and video surveillance from anywhere the thief picked up the money. But in most cases, law enforcement agencies can’t do anything—in many cases, the scammers are overseas and impossible to find.

Unfortunately, it’s easy for thieves to give you the impression that they are local. They can send and receive text messages using local numbers, and even reference physical locations such as, “I’ll meet you at the gas station next to the blue house on First Street and Broadway.” A local address is easy to find using tools like VoIP (a service that allows you to make phone calls over the Internet) and Google Street View.

A Word About IDs

Remember, the rest of the world might look different from your corner of the globe. You probably have state-issued identification (such as a driver’s license), and you might even have a U.S. government-issued passport for identification. In developing countries, not everybody carries ID, and they might not have to show ID to receive a Western Union payment. Fake IDs might be easier to come by and less recognizable in other places.

Plus, recipients sometimes just need a few details about the transaction—perhaps a transaction ID, known as the MTCN, or their name, to walk away with your cash. Scammers will even promise that Western Union can set what's called a passphrase for the transaction, but that offers little if any, protection.

Alternatives to Western Union

Western Union is useful for sending money to people you know, but it’s not your best option for online sales or purchases. As a last resort—with a seller who has enough of a reputation to inspire confidence—it might work, but don’t put too much money at stake.

Here are two other (safer) ways to conduct financial transactions.

Craigslist transactions: On this platform, insist on local-only, cash-only buyers unless you have a good reason to do a transaction otherwise. That should eliminate any overseas money transfers. Of course, your physical safety is more important than your money, so only conduct business in safe, neutral locations when you sell things on Craigslist.

Online sales: Safety first should be your moniker. You should always use a service such as PayPal to protect yourself. If you sell on eBay, the site has a dispute resolution process that works well 99 percent of the time. Sure, there are horror stories about eBay and PayPal policies, but most of the time buyers and sellers walk away happy. For a more customized deal, try an online escrow service, which can help both parties trade with confidence.