October 6, 2007

Western Union fees: Straining at a Gnat

Monique Chartier

The Providence City Council unanimously passed a non-binding resolution Thursday night endorsing a boycott of Western Union, making it the first city in the United States to do so.

Activist groups nationwide have been organizing small protests against the company for the past month, charging that Western Union’s fees are too high, and that the company does not give back enough to the people and countries it serves.

City Council members estimate that Western Union handles 55 percent of money transfers to and from Providence, and last night, the 15-member City Council unanimously approved a resolution supporting the campaign.

Setting aside for the moment that whole capitalist concept of allowing prices to be established by willing buyers and willing sellers, as of 2004, legal and illegal immigrants have been sending $39 billion annually out of the United States and back to their home countries. This is the "camel" which the Providence City Council appears willing to swallow.

Let's be clear. There is no question that visiting workers earn the dollars which they remit home nor that they have the right to do so. However, it seems a bit incongruous for the Providence City Council to condemn on the basis that the company "does not give back enough to the people and countries it serves" the amount of the fees which enable the transfer of $39 billion annually out of the United States.

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Perhaps it is time to fight fire with fire?

Who will pledge to boycott Providence businesses until the City Council rescinds this resolution?

Hit them where it hurts!

Posted by: Aldo at October 6, 2007 3:57 PM

Although I don't dispute that the amount of money taken from the U.S. economy is in the tens of billions, I think the figure of $39 billion which you quoted is on the low end. I've seen a reliable figures mentioned in the $100-$250 billion dollar range.

I happen to think that Western Union's rates are very reasonable, considering what they do. Unlike the communists and socialists (and I'm not speaking figuratively in this case), I'm for the free market setting prices on everything that is not absolutely required to keep us alive. Western Union is a private company. The Providence City Council, nor any other government entity, has any right whatsoever to tell them how much they should charge for anything. If you don't like their prices, find someone else to do it -- ir better yet, don't!

However, if Western Union should be "condemned" for anything, it's for enabling illegal aliens to easily siphon funds out of our economy. We need to look for ways to create incentives to keep money in the U.S., not make it easier. I think a common sense approach would be to require proof of citizenship or legal residency whenever someone does an out of country money transfer, as well as more stringent requirements for ID's. That would serve the purpose of better tracking where the money is coming and going from (since I suspect that much of the money is not earned legally or "over the table" to begin with), as well as providing incentives for people to work in this country legally. What ever happened to common sense?

Posted by: Will at October 6, 2007 4:39 PM

Right on Will!

Providence: a sanctuary city from common sense.

Perhaps we should rename the Providence River the Pesos River.

Posted by: Ragin' Rhode Islander at October 6, 2007 4:50 PM

"I've seen a reliable figures mentioned in the $100-$250 billion dollar range."

Will, you're raising a good point.

I had also heard figures in that and went looking for them. After several hours of research on two search engines, I could only find evidence for the $39b figure. As nothing gets posted on Anchor Rising that cannot be documented, that was the figure I went with.

But if you can provide a link, I'd be glad to correct the post.

Posted by: Monique at October 6, 2007 8:52 PM

I'm way ahead of you, I live in Warwick and I've been (unofficially) boycotting Providence businesses for years. You know who really isn't giving enough back to the people who pay the bills in this state, the welfare queens and lay about thugs that have a death grip on our state budget.

Posted by: jd at October 6, 2007 8:55 PM

Has the city council ever looked at how much wire transfer fees at a bank are? Western Union is a bargain by comparison.

Posted by: Josh at October 6, 2007 9:19 PM

I'm with J.D. The only time I'm in Providence is when I'm driving past it on Rt 95.

Posted by: Greg at October 6, 2007 9:31 PM

maybe the irs should start investigating where all this money comes from and if taxes were ever paid on it.

Posted by: johnpaycheck at October 6, 2007 9:32 PM


Of course, the problem with any figure which may be used to quantify the problem, is that they are basically educated guesses. Although I presume it, I don't know if Western Union or the other wire transfer agents keep track of how much money they send out of the country annually (or more precisely, being a private company, I don't know if they report that kind of breakdown to the government or other public entity).

The way I understand Western Union, having used it myself on occassion, if you send under $1000 at a time, no ID is currently required from the sender (of course, if it might be required, it could probably be faked anyway), only from the recipient (and of course, as the recipient is likely in a country not on the cutting edge of biometrics and smartchip technology, those IDs are even more easily faked). Of course, sending larger amounts of money triggers greater scrutiny. Remember, anything over $10,000 would trigger all sorts of IRS anti-money laundering bells and whistles (such as Bank Secrecy Act reporting) -- which is why wire transfers in excess of that amount are very rare (people don't like to fill out the paperwork and to answer questions they might not want to provide for government oversight).

My guess is that one of the reasons why these groups are complaining is the people they claim to represent send money out of the country in smaller amounts (under $1000 at a time), but also do it fairly regularly. Although "structuring" to avoid reporting is technically illegal, it's also very common. By structuring, they avoid the necessity of needing valid ID to send the money (or having to prove that the income was made legally, such as what one would be required to provide on an IRS document on larger amounts).

Besides requiring valid IDs to send money out of the country in any amount, we also need to make sure that people who are sending it made it the right way, by having worked in this country legally. I believe that once you make money, that it's yours, but that's also assuming that it was made legally. If you're using fake documents to work in this country, it's really not all that much better than if the money had been made through drugs and prostitution. There is no "right" to take anything from this country if you're not here legally to begin with.

I just checked the Western Union website, and here's a little breakdown of what they require from a sender, if sending cash through an agent:

For money transfers of 1,000 to 2,999.99 USD, senders must provide one of the following forms of valid identification:

Driver's License
State Issued identification Card
Alien identification Card or
Government identification

For money transfers of 3,000 USD and above, senders must also provide their:

Social Security Number
Date of Birth
Occupation along with valid identification

PS Anyone notice this: "Alien identification Card or
Government identification" Remember the Matricula Consular cards? That's why they're highly coveted.

Now I'm going to bed!

Posted by: Will at October 7, 2007 2:59 AM


This is America, It's their right to do whatever the hell they want with the money they make.

My DAD just sent me alot of money through Western Union, and guess what, I CANT F***IN GET IT, because Providence banned it. And anyone who says that a corporation is racist because there are no black people on the board of the directors...THEY ARE RACIST saying that there HAS to be a certain kind of person anyone, is WAY BEYOND RACIST and how no one can see that is rediculous. Now go ahead and delete this comment because it disagrees with your point!

Posted by: Rob at October 12, 2008 8:05 PM
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