Under Investigation: Western Union Speedpay® Fees
Have you ever used Western Union Services to make a payment over the Internet? Western Union Speedpay®, can be used to make payments for utilities such as eletricity or home home heating oil, phone bills, auto installment contracts (car payments), cable/satellite, credit cards, insurance bills, mortgages, government agencies, and to make other payments. If you have used Western Union Speedpay® to make a payment online, please contact us. We are investigating fees Western Union assesses for making such payments.
Information About Western Union
Hikmet Ersek is the President, Chief Executive Officer and Director of The Western Union Company, also known as Western Union Financial Services, Inc. Western Union is headquarted at 12500 East Belford Avenue, Englewood, CO 80112. Western Union is publically traded on the New York Stock Exchange under the symbol WU.
According to Bloomberg, the CEO of Western Union received compensation of 6.9MM in 2012, and the company’s “Consumer-to-Business segment provides options to make one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers, government agencies, and other businesses.”
The company got it’s start in 1851 in Rochester New York under the name “New York and Mississippi Valley Printing Telegraph Company. After a merger in 1855, the company was reborn as The Western Union Telegraph Company. As the telephone replaced telegraphs around 1879, Western Union transitioned into the money transfer business. Western Union was one of the first companies listed on the New York Stock Exchange. Today, due to its steady acquisition of most of its competitors over the years, Western Union enjoys what many consider a monopoly on the U.S and global money transfer business.
Western Union & The Underground Economy
Does Western Union help support an illicit “Underground Economy?” The ability to send money without first depositing it into a checking account can sometimes be a convenience for legitimate purposes, such as quickly paying a bill, or sending cash to a friend or relative in need. However, If you’ve spent any time in a Western Union location, you might wonder where much of the money that passes hands at Western Union agent locations came from, and where it is headed. Some who frequent Western Union agent locations do not have bank accounts. Some are paid in cash for work done “under the table” or from nefarious activities such as drug dealing. Why do these meccas for “unbanked” consumers do such a brisk business? Questions about whether Western Union’s services can be used to accomplish tax evasion, facilitate drug trafficking, or divert money directly from the U.S. economy, trouble some. Western Union’s recent SEC filings reveal that Western Union is aware of the financial benefit to the company of providing a way to move money to “Informal networks.” “Informal networks” is a term Western Union uses in its own Feb 21, 2013 form 10-K Annual Report. Western Union defines the term: “Informal networks enable people to transfer funds without formal mechanisms and often without compliance with government reporting requirements. We believe that such networks comprise a significant share of the market.”Is that corporate-speak for “we know we may help drug dealers and undocumented workers send money out of the country without alerting the IRS — but it’s good for our bottom line? Should Western Union be held accountable for its role in the underground economy and face tighter money transfer reporting requirements?
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