If you try to send money to a party, should it take the sending company five years to tell you that the money was never received? The complaint for this class action alleges that the Western Union Company and Western Union Financial Services, Inc. have still not corrected the behavior for which they were sued years before.
On, April 11, 2013, plaintiff Ibolya Radulescu used Western Union’s money transfer services to send $100 to her relatives in Romania. Unfortunately, either Western Union did not deliver the payment or it was never redeemed—that is, the money never reached her relatives. However, the company did not notify her of this fact until sometime in August 2018, five years after she’d sent the money.
Was it an oversight? No, the complaint asserts. “Western Union purposely does not notify the customer and holds onto the customer’s money and makes use of it by using it to make financial investments and earn interest for its own benefit until applicable state statutes require the funds to escheat to the state unless otherwise claimed by the customer.” Then, to make it worse, Western Union charges the customer a fee to get the funds back.
Why does the complaint claim that this is deliberate? The complaint says, “Western Union brags about this unfair and deceptive business practice in its publicly filed financial statements, telling investors it always has access to more than $100 million in cash from these unremitted funds that is essentially better than an interest free loan because Western Union gets to both make use of the money and then ultimately, after using the money for years, charge the customer a fee to return the money instead of paying the customer interest.”
Western Union’s Form 10-K for the year ending in December 2007 reports that such unsettled transfers, or “settlement assets” are used to “earn income” for the company. It reported $203.5 million in such “assets” in 2007 and $348.8 million in 2006.
On April 23, 2009, the class action Tennille v. Western Union Company, 2009-cv-00938-JLK, was filed, challenging this practice. This lawsuit was ultimately successful. However, it seems that the company has not changed its practices. For 2018, it reported $3.8138 billion in such unsettled assets.
The complaint alleges conversion, among other things.
The Nationwide Damages Class is all persons and entities in the US who sent money via Western Union’s money transfer services and whose money went unredeemed and was not returned within sixty days, and who were not part of the settlement class in the Tennille action.
The Injunctive Relief Class is the same, but without the “in the US” provision.
Washington and Colorado state subclasses have also been proposed.