Analysis By Jeremy Scott-Joynt BBC News business reporter

Online auctions are a popular conduit for scammers to find targets

Money transfer giant Western Union is to step up its battle to prevent fraudsters from misusing its services.

A deal with the Metropolitan Police means its customers will now have to sign a form confirming they are sure they are not being defrauded.

Western Union will also encourage its staff to turn down transactions they believe are suspicious.

Victims are conned out of as much as £1bn a year, according to Western Union and the Office of Fair Trading.

Western Union is often unwittingly used as a conduit for fraudulent deals such as lottery scams and online auction fraud.

The move follows an approach by the Met's Economic and Specialist Crime division to Western Union's management in the US.

The Met says it has approached other services commonly targeted by scammers, including auction giant eBay.

"We are heavily engaged with eBay to get the same kind of partnership," said Detective Chief Superintendent Nigel Mawer, head of economic and specialist crime.

"We are optimistic we will get somewhere with it."

Out of pocket

In total, victims are conned out of as much as £1bn a year, according to Western Union and the Office of Fair Trading.

Money transfer should never be used for sending money to a stranger, someone whose identity cannot be verified Peter Bucher, Western Union

One popular scam is for unsuccessful auction website bidders to be contacted by people claiming to be the seller and offered the item directly.

Others involve sellers of big-ticket items like cars being asked to return - or send on - part of a large cheque to "shipping agents". The cheque later proves to be forged and so the seller is left out of pocket.

Some victims respond to claims they have won millions on foreign lotteries - only to be asked for thousands in taxes, clearance fees and other expenses.

Stranger danger

Many of these scams use Western Union as the conduit for delivering the proceeds, Mr Mawer said.

Western Union says it does not want this kind of business.

It wants concentrate on its core customers - who use the service to send funds to relatives and friends overseas - and avoid being used to pay for goods and services unless the sender is absolutely certain who they are doing business with.

"I want to highlight the fact that money transfer should never be used for sending money to a stranger, someone whose identity cannot be verified," said Peter Bucher, the firm's vice-president of operations for Europe, the Middle East, Africa and South Asia.

Lottery scams cost UK citizens £150m a year, the OFT says

Few people know that even if someone says they are in a foreign country, they can collect money from any Western Union office.

That leaves the service open to abuse by scammers who pretend to be abroad, and so cannot take a cheque, but are in fact in the UK.

Transactions via Western Union are also hard to trace as they offer little to identify the recipient beyond a piece of id that may be a forgery - bank transfers must go into an account which leaves a paper trail.

Sender beware

From now on Western Union agents in the UK - often small shops or newsagents - will give customers a form warning them about potential scams, and that once a transfer is sent it cannot be rescinded.

Customers will have to sign the form to say they are "satisfied with the identity and intentions" of the recipient.

It also tells customers to ask themselves whether the offer sounds too good to be true and whether alternative methods of payment have been offered.

Agents will receive training to spot likely victims - and will be encouraged to refuse transactions they think involve fraud.