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.

The key to these scams is the fact that when you transfer money by Western Union, the recipient can walk into a 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.

In many cases, there’s also no way to find out who got paid.

If somebody asks you to send money with Western Union, be aware that the money is gone for good – only do it if you’re 100% sure who you’re sending to. Especially if you’ve never done business with this person before (and even then it’s not a safe bet, especially in the case of money transfer jobs).

Usual Suspects

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? They’re surprisingly good at what they do and they convince people to do it every day:

  • They send extra money to cover shipping costs, especially for large expensive-to-ship items
  • They were “planning” to rent your apartment, but things fell through and they want the security deposit back
  • They got a cashier’s check for the wrong amount, but they trust you to send back any excess

A more simple scam happens when thieves sell something, demand payment by Western Union or MoneyGram, and never deliver.

But I Already Got Paid!

What about the funds you “received” from your buyer – aren’t you protected?

Unfortunately, money does not move through the banking system as fast as you might expect (unless you use a 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. Your bank will allow you to withdraw the funds as if the check was good, but you are ultimately responsible for the money: 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 might 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 taken back – to the scammer.

How do they do It?

You might be skeptical and think nobody could get away with these scams: if somebody scams you, can’t the police easily find the thief (tracking down information from the bank accounts, and video surveillance from anywhere the thief picked up money)? In most cases, law enforcement agencies can’t do anything – the scammers are overseas and impossible to find.

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 1st and Broadway”) – all of this is easy using internet tools like VOIP and Google Maps.

If you’re selling on Craigslist and somebody wants to do anything besides buy or sell in-person with cash, you should assume they are overseas. If you’re selling on eBay (or anywhere else) and a buyer says anything about you sending money to them, watch out.

Also, 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 US 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. Recipients sometimes just need a few details about the transaction – perhaps a transaction ID (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.

Alternatives to Western Union

Western Union is not your best option for online sales (or purchases). As a last resort – with somebody you’re 100% confident you can trust – it might work, but there are better methods.

For Craigslist transactions, insist on local-only cash-only buyers unless you have a good reason to do otherwise. That should eliminate anybody watching from overseas. 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 extremely well 99% 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.