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Untied States Of Latina asks
Four months ago, Gwen Gampon wired $1,030 to her brother from a Western Union Co. outlet in Anaheim during a family emergency.
In Hawaii, her brother, who is unemployed and doesn't have a checking account, ended up with just $950 -- after the money-transfer company deducted a $79.99 fee for the immediate transaction.
"Western Union is seen as a lifeline," said Gampon, a refinery worker from Garden Grove. "That lifeline, however, has an ugly side that preys on those that are already in financial need."
Sending money to less-affluent relatives is an age-old practice that grows more popular every year because of robust immigration and improved technology. In Southern California, Latinos have long depended on electronic transfers to send money for food, medical care and education to their families back home.
Now, 158 immigrant advocacy groups from around the country are accusing Western Union, the largest U.S. money-transfer company, of charging exorbitant fees while failing to adequately reinvest in immigrant communities. In Los Angeles on Monday, the groups launched a nationwide boycott of Western Union, demanding that the Englewood, Colo.-based money-transfer giant lower its fees and put some of its profit back into the communities that use its services.
"Today, we ask consumers to use other money-transfer services," said Francis Calpotura, executive director of the Transnational Institute for Grassroots Research and Action, during Monday's news conference and protest march. "We understand that this might cause some inconvenience in the beginning, but this is the only way we can deliver a powerful message to Western Union."
In response to the complaints, Western Union said its rates were in line with similar money-wiring services, such as Minneapolis-based MoneyGram International Inc.
"We're proud to provide fast and reliable trusted services at competitive prices," spokesman Daniel Diaz said. "If you look at the marketplace, consumers today have choices -- more so than they ever did before."
The dispute underscores the growing demand for affordable and fast money transfers. The World Bank estimated that in 2005, poor nations received more than $250 billion in receipts from international workers, more than all foreign aid combined.
Western Union, which handled 147 million consumer-to-consumer money transfers last year, said it controlled 17.4% of the global remittance market. Transaction fees vary depending on the amount sent, its destination and how quickly the funds are disbursed. To instantly wire $1,000 or less to Mexico City, for example, Western Union charges a transaction fee of $14.99, a company spokesman said.
But customers, many working low-wage jobs, said the fees were too high. The groups didn't specify what they considered a fair fee, but cited a World Bank report saying that Western Union could cut its fees by a third and still generate profit comparable to its rivals.
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