Boycott protests Western Union fees

David Milstead, Rocky Mountain News

Published September 14, 2007 at midnight

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Western Union has spent much of 2007 worrying that some of its customers have stopped sending money for fear of deportation.

Now, an immigration-advocacy group is urging the transmitter's customers to stay away for a different reason: The company's prices are so high, the group says, they're exploitative.

The Transnational Institute for Grassroots Research and Action, an Oakland, Calif.-based group, is launching a boycott. The group says Western Union's fees are too high and it doesn't reinvest enough in the communities it serves.

The boycott announcement comes just as Douglas County- based Western Union announced a new, five-year, $50 million charitable-giving program called "Our World, Our Family."

The program includes scholarships for children in two-country families and immigration advocacy. It follows the company's earlier five-year, $40 million program of giving.

"We believe our level of giving is comparable with others in the industry," said spokesman Daniel Diaz. "We strongly believe our model of contributing to communities is working."

Francis Calpotura, founder of the boycott group, argues that the charitable giving is small in relation to the company's size, particularly when its fees "come from families without a lot to begin with."

Western Union's pricing has been a sore point before. The company faced a number of lawsuits in the 1990s that alleged consumers were misled by the company's undisclosed profits on foreign currency exchange. They were settled in December 2000, and the establishment of the Western Union Foundation was part of the deal.

There's no question the company's prices are higher than its competitors', as the company positions itself as having an unparalleled branch network: 300,000 agents worldwide, or as many as the next eight largest money transmitters combined.

Competition on certain transmitting "corridors," particularly to Mexico, has been intense in the past several years, and Western Union reduced prices to narrow the distance between it and other companies. Still, said Gwenn Bezard, research director at consulting firm The Aite Group, Western Union's prices remain about 10 percent to 15 percent above closest competitor MoneyGram.

"To an extent, you can argue it's too expensive," Bezard said. "But there aren't too many good alternatives."

Finance Editor David Milstead can be reached at milstead@RockyMountainNews.com or 303-954-2648.

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