DENVER (CN) - Western Union makes millions of dollars from money transfers by failing to inform senders if their money is not claimed, or waiting for "several years" before telling them, keeping the interest, and charging extra for holding the money all that time, a class action claims in Federal Court.
Western Union calls the unredeemed moneygrams "unsettled money transfers" or "settlement assets," according to the complaint. "Western Union reported $203.5 million of such 'settlement assets' on hand in 2007 and $348.8 million on hand in 2006," according to the company's 10-K filings, the complaint states. (It is not clear from the complaint whether those sums are annual, or accumulated over the years.)
The complaint continues: "In the event that Western Union does contract the customer regarding the unredeemed funds, Western Union does not reimburse the customer for the interest generated by holding onto the money. Instead Western Union charges a fee that it had not previously adequately disclosed for holding onto the money."
Named plaintiff James Tenille says Western Union waited for more than 5 years before telling him that two monthly mortgages he had sent had not been redeemed.
Tenille and the class are represented by Seth Katz with Burg, Simpson & Eldredge.
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