Western Union Scams

How They Work, How to Avoid Them

Money Transfer Van
••• Good luck finding out who picks up money here. 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. While Western Union is a legitimate business that provides valuable services, Western Union is also a favorite tool of online thieves.

There are two key facts to 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.
  1. In many cases, there’s no way to find out who got paid. You might have specified a recipient, and the agent might even require identification, but it’s relatively easy for thieves to work around those rules.

With that information in mind, it’s easy to understand why you should only use Western Union to send money to somebody you know—and verify that nobody is impersonating that individual. Especially if you’ve never done business with somebody, remember that the money will be gone for good, and decide if it’s worth the risk. Even if you have worked with the recipient before, it’s not a safe bet: Money transfer job scams train you to get comfortable with increasingly large transactions, and you eventually suffer significant losses.

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 they persuade people to send money every day.

Red flags of popular scams include:

  • A buyer sends you extra money (more than the purchase price) to cover shipping costs, especially for large 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 just take your money up front: They sell items online, demand payment by Western Union or MoneyGram, and never deliver.

But 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: If the check bounces after you withdraw cash, you’ll have to replace those funds somehow.

The same is 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 he might simply dispute the transaction. Either way, you won’t find out about it until after you’ve sent “good” money—which can’t be recovered—to the scammer.

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 money. But in most cases, law enforcement agencies can’t do anything—the scammers are overseas and impossible to find.

Local appearance: 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 (“I’ll meet you at the gas station next to the blue house on First and Broadway”).

A local appearance is easy using internet tools like VOIP and Google Street View.

Local practices: Remember that 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 a “passphrase” for the transaction, but that offers little if any protection.

Tip-offs: If you’re on Craigslist and somebody wants to do anything besides buy or sell in-person with cash, assume they are overseas. If you’re selling on eBay (or anywhere else) and a buyer says anything about you sending money to them, it’s almost certainly a scam.

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. There are other ways to pay.

For Craigslist transactions, insist on local-only cash-only buyers unless you have a good reason to do 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 arrange things on Craigslist.

For online sales, use a service to protect yourself (and you can also provide peace of mind to the other party, which might make the deal more attractive). If you sell on eBay, there’s 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.