Internet Fraud Advisory Group

A not for profit group based in Britain

The European Payment Services Directive  - a charter for criminals.

 Why should Western Union have a right to deny fraud victims information about the collection of money by criminals? If you live in the USA, can you please explain why, in this era of freedom of information, even American victims have no right to know where their money was collected. 

This article was written in 2008. We presume that the European  Payment Services Directive has now been rolled out. The last UK Labour government ignored our warnings. The fraud criminals remain free to exploit the anonymity offered them by the cash transfer companies.   

We recently became aware that the Payment Services Directive has to be incorporated into British law by 1 November 2009. It seeks to establish fair and open access to payments markets, and to increase protection for consumers. In fact, big business may well benefit, but consumers - and especially Internet fraud victims - have a right to feel betrayed.

The mechanics of Internet fraud. Such fraud depends upon the secrecy of the money transfer companies. We can use Western Union as an example because that company is responsible for processing most fraud payments. You can check the evidence for this here. Fraud victims from around the world report to us because in many cases they have sent money to be collected at Western Union agencies in Britain. We ask victims to contact Western Union for details of exactly where the money was collected but the company will flatly refuse to give the information.

This is how the fraud criminals instruct victims to make payment.
(From a fraud mail of November 2008)

"The delivery option payment should be made to the HILTON POST COURIER SERVICES Account Manager. Moreover, remittance is to be made by Western Union Money Transfer to our Account Manager only.

Name of Receiver: ======== Mr. Akudo Ben
State/City of Receiver: ===== London
Country of Receiver: ====== United Kingdom

Furthermore, Western Union Money Transfer is our preferred means of receiving payments from customers, as it is less cumbersome and faster*. If you insist on paying via this means to let your Parcel to be delivered to you, quickly go to the nearest Western Union Money Transfer and make the delivery option payment which you have chosen as your preferred Shipment Option. "

*He means that this method of payment offers him complete anonymity!

Why are the money collection details so important? By refusing to divulge the money collection locations, Western Union protects fraud criminals from unwelcome attention. It is well known that victims of Internet fraud do not often report cases to the police. It is suspected (on good grounds) that police forces do not have the resources to tackle cross border fraud of this sort. If victims were entitled to know exactly when and where their money had been collected, they could report to us and enable us to pass on to the police the locations of fraud hot spots. These would, no doubt, include the premises of agents who collaborate with the fraudsters. The police (or other enforcement agencies) would be able to visit such premises and ask to see video footage of fraud collections. We might even see some overdue arrests. The Home Office is unable to supply statistics on arrests for Internet fraud offences - we suspect that such arrests are very rare and we know that the scammers can operate with impunity.

What does the Payment Services Directive say about consumer rights? Precious little! There is much guff about transparency in regard to commission costs and exchange rates but we need only look to Article 38a in order to find the fraud criminals' charter.

Article 38(a) of the PSD
as it appears in the Official Journal of the European Union.

Information for the payer* after receipt of the payment order.

Immediately after receipt of the payment order, the payer's
payment service provider shall provide or make available to the payer, in the same way as provided for in Article 36(1), the following information:

(a) a reference enabling the payer to identify the payment transaction and, where appropriate, information relating to the payee*;

*Note - In fraud cases "the payer" is the victim and "the payee" is the criminal who collects the money.

So, the money transfer company has the right to decide what information it should release to fraud victims - who are also paying customers! 

Changing a simple sentence would cut Internet fraud at a stroke. If we could change "and, where appropriate, information relating to the payee" to something like  "and, on request, information relating to the exact time and place of the money collection", fraud criminals would be deprived of the protection they presently enjoy.

We would all receive less spam!  If the fraud criminals find it too risky to collect victims' money from, for example, Western Union agencies, why should they bother to deluge us with "lottery winner", "fake loan" and "work at home" junk mail?

But those who should be protecting us are asleep on the job. We have raised our concerns about Internet fraud and the secrecy of the money transfer companies with HM Treasury, the Home Office, the Office of Fair Trading, Consumer Focus and the Financial Services Authority. It is fair to say that not one of those showed any interest in supporting our campaign for transparency, some of them did not even appear to know about the PSD. It was also disappointing to find that the Home Office was quite unconcerned by our report that the present situation encourages foreign fraud criminals to settle in the UK.

We contacted the European Commission and this was the relevant part of the response: "The Payment Services Directive does not deal with this issue. Article 38 indeed lists the information that Payment Services Providers must provide or make available to the payer immediately after the payer has given his payment order to the Payment Service Provider, ie at the latest before he leaves the provider's office. It therefore does not cover situations where a payer would come back after realising he had been victim of a fraud. It is up to national authorities to regulate such situations. We therefore kindly invite you to discuss this issue with the authorities in charge of such legislations in the United Kingdom.".

Recent research (2008) demonstrated that the UK electorate has a diminishing faith in the administration of Britain's crime and justice system. People feel that the scales are tilted in favour of the criminals. If the PSD enters British law without the amendment we suggest it will indeed favour the fraud criminals  - and the money transfer companies who profit from their activities.

UK government attention to Internet fraud should be a priority for your Member of Parliament. You can help by drawing the attention of your MP to this issue in a surgery appointment or via e-mail. You can e-mail your MP via the WriteToThem website.

Can our Houses of Parliament take a stand - and make a difference to the world? If money collection locations were revealed to fraud victims (in cases where money was sent or collected from UK agencies of the money transfer companies), vulnerable people around the globe would have cause to be eternally grateful. We know that the House of Lords is very concerned about the extent of Internet fraud - will the Commons stand up for the consumer when the PSD comes before them?  

For more information about the Payment Services Directive check HM Treasury website 

and The European Commission website.


John Weston,  IFA Group, October '08


Please, before forwarding suspicious mail, check that you have included FULL INTERNET HEADERS (see below). It is not always possible to respond to reports of fraud mail, but appropriate action is always taken.