Western Union Receives More Info Requests From State Attorneys General

   By Andrew R. Johnson 
 

Western Union Co. (WU), the world's largest provider of money-transfer services, received additional information requests in the third quarter from state attorneys general over its consumer-fraud prevention measures, the company said Tuesday in a regulatory filing.

The requests came in the form of Civil Investigative Demands as part of a probe into whether the company "took adequate steps to help prevent consumer fraud from 2010 to 2011," Western Union said, adding the requests "seek information and documents relating to consumer fraud complaints that the company has received and the company's procedures to help identify and prevent fraudulent transfers."

Western Union operates a remittance network that allows consumers and businesses to send money domestically and abroad. Its consumer services are sold through a network of 510,000 agents, including grocery stores, pharmacies, payday lenders, banks and other retailers, and cost a fee based on the amount of money customers are sending and where they are sending money to.

The company previously had disclosed it received similar requests in the fourth quarter of 2011. The new disclosure was made in Western Union's 10-Q filing with the Securities and Exchange Commission.

The company said it couldn't predict the outcome of the investigation or quantify any potential losses that could result from potential civil claims tied to the probe.

Western Union's stock dropped 29% last Wednesday, a day after it reported third-quarter results and announced a major price cut, citing increased competition.

Western Union's shares closed up 1.6% at $12.41 on Tuesday and were inactive after hours.

Write to Andrew R. Johnson at [e-mail]

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