The $586M mentioned covers 8 years (2004-2012). So $73M/year.
In 2015 they moved $82B.
Edited:
This settlement is saying the amount of money they move fraudulently is less than 0.1% of their total money movements. This seems entirely implausible. 10% seems a lot more plausible.
I speculate that Walmart thinks it's good business to make a minimal profit on the money transaction because a substantial portion of the money winds up being spent in the Walmart store where it's received.
However, the low overhead of the service probably contributes to the lower cost as well. This isn't their main business and Walmart already have TONS of locations, they don't have to pay rent or commission on physical locations nor do they have to pay for labor, the employees would be there anyways. It doesn't cost them hardly anything to add this service to their main business.
I get the sense that almost none of the fraud victims are themselves Nigerian or Ghanaian, while virtually all of the legitimate senders will be.
What are you basing that on?
(And yeah, it's still an estimate, since no-one except WU has any possibility of knowing the truth. Still, 0.1% seems fraud seems like an awefully low estimate, doesn't it?)
You revised it down to 10% now; why? Don't get me wrong, 10 is a great number, much better than 11, but I still don't see any rationale.
To add a perspective: They paid about a penalty for about a 1/1000th of the money they move around. What's your guesstimate for how much of WU money is based on fraudulent transfers?
There are concepts such as "experience", "pattern recognition", extrapolation etc.
That said, I think arguing about how big the fine should be is accepting the faulty premise that a fine is an acceptable penalty. Wire fraud is a felony. I know someone who went to prison for it. The article says "[Western Union] agents were helping scammers avoid detection" and "Fraudsters [...were...] giving Western Union agents a cut in return for processing the payments". They willingly participated in felonies for personal profit. Shouldn't they—and all the supervisors who can be proven to have condoned their actions—be going to prison? Or is this okay just because everyone's doing it and they have a fancy corporation to hide behind?
I would say that's incredibly naive and refer you to this comment: https://news.ycombinator.com/item?id=13465310
"For example, a seven-state survey found that approximately 29 percent of Western Union money transfers to Canada in excess of $300 were fraud-induced."[1]
and
"The world’s largest money-transfer company reported a 27 percent drop in fourth-quarter profit, largely due higher costs linked to tightened regulations to prevent money laundering."[2]
Seems like something might be afoot there.
[1]http://www.mtraweb.org/state-attorney-generals-agreement-to-...
[2]http://www.huffingtonpost.com/2014/02/25/western-union-inves...
https://chargedaffairs.org/billion-dollar-industry-nigerian-...
"a follow-up study in 2013 found that the number had jumped to $12.7 billion. This would make the 419 ‘industry’ roughly the same size as the GDP of Botswana."
I believe the vast majority of this is transferred via Western Union.
> Percent of Americans who have been victims of credit card fraud--10%
0.1% seems very low. I suspect that companies wouldn't even bother with compliance departments if it were actually that low.
Interviews with Ebay execs suggest rates closer to the 3-5% range, and it takes a lot of work to keep it that low.
30% is probably high. But probably not by a huge amount.
I can make up numbers too! Western Union fraud is actually 1035% of all of their transactions. Seriously.