Western union fees for money transfers to families abroad are at issue.
On May 9, Amina Dualle marched into the Western Union shareholder’s meeting in New York City with more than a hundred activists from across the country. They laid a demand on the table—they would give the company 100 days to re-invest in the immigrant communities that have become the lifeblood of the corporation’s business. If officials failed to comply, immigrant groups around the world were poised to announce a global boycott of the company until it agreed to work with their communities. As of yet, Western Union has remained mute.
Dualle, who works as an organizer for the Minneapolis-based Somali Action Alliance, is forging local connections with another non-profit named TIGRA (Transnational Institute for Grassroots Research and Action). TIGRA has held workshops on economics and immigration around the world-from church basements in Brooklyn to tents set up in a field in Brazil. The group hopes to raise awareness about the scale of remittances—the amount of money sent by immigrants to support relatives in their native countries—and how they shape and move the global economy.
“We want to help people see remittances as a collective act instead of an individual one,” says Francis Calpotura, director of TIGRA. Calpotura, a native of the Philippines where almost 3,000 people go abroad every day in search of work, says that the issue of money transfers is very personal to him. “Last year $260 billion was transferred from the north to the global south, mostly through Western Union wire transfers. Western Union made $1.5 billion in profits from low-wage workers. “
The story began in 1995 when Western Union was crawling from the wreckage of bankruptcy. In a world injected with ATM networks and internet money transfers the fallen giant was struggling to find a place for itself in the approaching millennium. The telegrams that jump started the corporation were becoming extinct, and most people were finding new technology to send money across the country. It was then that CEO Charles Fote hit upon an untapped gold mine—immigrant communities.
Western Union quickly began setting down roots in the African, Asian, and Latin American neighborhoods that were popping up in urban areas—not only in the United States but Europe, Canada, and any other areas absorbing masses of political and economic refugees. As human labor was becoming the largest export of many developing countries, the company established itself as the new leader in transnational wire transfers. Last year it was operating in more than 200 countries, earning almost twice as much in profits as their nearest competitor, Moneygram, according to TIGRA. According to other sources, Western Union actually grossed almost five times as much as Moneygram. Through its dominance of the market it has the luxury of setting transfer fees as it pleases. TIGRA says that Western Union charges an average of 13% for immigrants to send money back home to their loved ones. Then there are the hidden fees, which Dualle herself found out when trying to send money to Kenya.
“I needed to send $6,000 to Kenya, and the ad said it would cost me $10,” she says. “But when I went in there they asked me-which part of Kenya? There are different fees to send to different parts. They finally told me it would cost $180. They’re never transparent.”
This lack of transparency resulted in a 2001 lawsuit against the company, claiming defendants weren’t informed that Western Union was setting their own favorable exchange rates to reap greater profit from currency conversion. After years of negotiation, the lawyers in the settlement walked away with $10 million while consumers who had been swindled were offered a $4 rebate check available by applying online.
“It was then that we decided a legal strategy wouldn’t work,” says Calpotura. In the aftermath of the lawsuit TIGRA came up with four clear demands to Western Union officials-1)that they lower their fees for wire transfers 2)that they set fair exchange rates 3)that they re-invest $1 per transaction to a fund controlled by representatives of immigrant communities and 4)that they begin a policy of responsible investment.
Western Union officials refused to comment on the impending boycott. A brief glance at their website, however, shows that it’s taking pre-emptive steps to promote an image as a responsible investor in immigrant communities. The company highlights its contribution to job-creation programs for minorities and claims to serve as a “resource, advocate, and trusted participant among grassroots and community organizations…” TIGRA claims this is misleading.
“None of these organizations that Western Union donates to are controlled by immigrant communities in any way,” Calpotura shoots back. “We need to have a say in the process.”
Local business owner Ricardo Inamagua also feels Western Union is less than fair to its business partners. His store, Two Amigos, has several different services that customers regularly use to wire money to relatives in Latin America.
“Western Union always has the highest rates, but in some places that’s all there is for people to use,” he says. “Let’s say someone’s sending $100 dollars to South America. Western Union will charge them $16 and I get $1.60. I don’t know where all that money goes to.”
Organizers are waiting with their fingers crossed, but for now seem to have little hope of Western Union negotiating with them.
“We’re ready for a boycott, we have other options we’ll be encouraging people to use when it starts,” says Dualle. “Western Union has been taking advantage of people for 175 years; that’s long enough.”