Western Union: Company in Legal Battle

Western Union has a service where you can send cash to someone elsewhere in the world. There are many reasons for such a service. People want to send cash to people in remote areas where there are no banks. People want to send cash to relatives abroad. People want to send funds to others who are disabled, or people who have no credit or bank accounts and can only get money as cash. And people, particularly day laborers from abroad working here, want to send money to their families back home. This is a cash economy, it exists and there is nothing wrong with it.

Locally, Western Union operates out of four locations in the Hamptons: Waldbaum’s in East Hampton, King Kullen in Bridgehampton, and the Rite Aid Pharmacy in both Southampton and Hampton Bays. You will sometimes see lines of people waiting at the counters there to make a transaction. You fill out a form with your name and address to send the cash. You fill out the name of whom you are sending it to. You don’t indicate a town, just the state or country they are in. Western Union takes your cash. They also charge a hefty fee for the service. For example, sending $300 can cost you nearly $20.

At the end of the transaction, the Western Union person gives you a receipt with a transaction number on it. At the other end, the receiver of the money either shows ID to prove who they are, or, if they don’t have ID, gives the answer to a test question the sender, having spoken to the receiver, puts on the form.

For many years now, I have been sending money to someone dear to me who needs to receive it in this way. As it happens, sometimes they remember to pick up the money and sometimes they don’t. I figured the transaction was secure. If my receiver didn’t pick it up, after a while Western Union would call or write to me to that effect so they could return my cash.

Last fall, I discovered that money I’d sent six months earlier had never been picked up. I called Western Union’s 800 number, told them the transaction number—I no longer had the actual receipt but had written the number down somewhere—and they told me the money would be returned to me. It never was.

I thought, well, I have been doing this for five years. Perhaps there were other transactions never picked up. Wouldn’t I have heard about it? So I called the 800 number again, and they told me they keep all records and would send me a list of all my transactions going back years. They did that. And the one that I knew was still not picked up was not on the list. It was as if it had never taken place.

More out of curiosity than anything else, I went down to Waldbaum’s in East Hampton and gave the Western Union representative the transaction number, and they looked in the computer and told me it was waiting to be picked up.

So Western Union HAD this information, at least here in the Hamptons. But whoever they had on their 800 number didn’t give it to me. I tried by mail for three more months to get that transaction, and others that might be like it, placed on the “not picked up” list. I was unsuccessful. I also found a receipt I had saved from years earlier that was not on the list, and, when I called, the Western Union operator told me it was waiting to be picked up.

What was happening to this money? I wait on line with everyone else when I send my money. On the line are all sorts of people, most of them working people, sending money somewhere. They count out the cash. They pay the fee. I talked to some of them. Indeed I was not the only one having this problem. “You have to be really sure who you send this to gets it,” one told me. I concluded that it was possible that piles and piles of people’s money was being held by Western Union. I did wonder if there might be some logic in their not returning it if you didn’t have the transaction number. But I couldn’t think of any. They have your address. They can write you.

Banks, knowing a money transfer is not completed, will inform you of it. Even regular businesses, if you accidentally pay for something twice, return a check or issue a credit.

I talked to a friend about this. Was this part of Western Union’s income, people sending money nobody picks up? I had a hard time thinking this could be so. “Read the small print,” he told me. I read the small print. There was nothing I could find that said they keep your money if it’s not picked up.

As a result of all this, I decided to do something about it—not just for my few transactions but for everybody’s, particularly those hard-working people who can least afford such a thing. I did three things. I filed a complaint with the Better Business Bureau in Colorado, where Western Union is based. I filed a complaint with the New York State Attorney General’s office. And I went to see Fred Thiele, our local State Senator. I had by this time found out that Western Union is regulated state-by-state.

So far I have not heard back from the State Attorney General. I did hear from the BBB in Colorado. Through them, I was able to email back and forth with a “customer advocate” at Western Union. He told me, in an email, that, going over my full list of transactions, he’d found four I had sent that had never been picked up. The third thing that happened is that Fred Thiele filed a bill in the State Assembly. It will require Western Union and other companies that transfer people’s money for a fee to return any money not delivered after 60 days.

Finally, yesterday, I got a letter in the mail, not from Western Union but from the Tennille v. Western Union Settlement Administrator. A class action lawsuit had been filed alleging that Western Union doesn’t always timely notify people that money sent hasn’t been picked up. Western Union has denied it did anything wrong, but the court is going to decide about a settlement. If the settlement is accepted, about $180 million may be returned to senders whose receivers never picked it up after 60 days. The period covered is January 1, 2001 to January 3, 2013. If the reader thinks they are owed money, they should fill out a form. I did.

I also read the small print. The court will hear requests from the plaintiff’s lawyers regarding payment, which could be as high as a
$54 million cut from the settlement for their services. It’s great to be a lawyer, isn’t it?

I think failing to inform someone where his money is when asked, while all the time having it on hand, is outrageous. I think on a going-forward basis, Western Union will see to it that monies not picked up are returned. I also intend to make copies of the letter from the Colorado court and ask our local locations to post them at their counters. I hope everybody gets
their money.

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