Business

Sending Money Home Costs Too Much, According to Latinos

pO157.

Posted to Business on Thu Aug 09, 2007 at 03:55:48 PM EST (promoted by port1080). RSS.

Latino immigrants returned $45 billion USD home in 2006, up from $30 billion in 2004. Now they want to make sure that more of it reaches their homeland instead of ending up in the pockets of transfer companies.

NJ resident Jose Villanueva sends some money back home to Honduras every month. However, for each $300 he sends Western Union charges between $11 and $15 as a fee to wire the money to his 3rd world nation.

Others who send money back to their homeland state the terms and rates charged by Western Union are unfair claiming it costs the company only $5 to process a transaction to send money to Mexico, yet the corporation demands $14.99 to send it within 1 hour, or $9.99 within a day. Immigrant rights groups claim that the actual amount is more like $20-23.

They point to the profits  claimed by Western Union from the cash transfer business and demand that some of the money be returned to their communities or rates be lowered. Western Union responds by saying that its prices are reasonable and they have been slashed repeatedly in the past several years as more competition moves into the field.

These latino groups demand more "community reinvestment by Western Union." A recent report shows Wal-Mart reinvests $2.30 per $100 of profits into community programs. Ben and Jerry's reinvests $7.50 per $100 of profits. Western Union, on the other hand, invests only 32 cents per $100 of profits into the community.

Western Union spokesman Daniel Diaz replies the company is "leading the trend in terms of transparency" and "We provide affordable and convenient services. It's important to note that consumers around the world have many options in terms of sending money yet they consistently choose us because we're trusted and have 150 years history of serving consumers around the globe."

Tags: edited by Port1080, written by pO157, remittances, Western Union (all tags)

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6

Why reinvest?

gerrymander.

Sat Aug 11, 2007 at 12:27:43 PM EST

5.00 (brilliant)

"Western Union made $6 billion as a corporation last year," said Leticia Alaniz, an organizer with La Union de La Comunidad Latina, a Brooklyn-based organization involved in TIGRA's campaign. "How much of that is thanks to Latinos? Western Union should reinvest some of that money into our communities."

I don't get it. Why should a business be obligated to reinvest in the communities more than the community residents do?  Think about it: Western Union's entire relationship with the people TIGRA represents is to speed the removal of cash from the local economy. That $300 Villanueva sends to Honduras doesn't do a bit of good to New Jersey businesses. What Western Union charges -- even before costs -- is only a fraction of what Villanueva could provide himself. If he doesn't feel guilt, why should the corporation?

(While we're at it, the article describes Villanueva as a "city resident," which is code for "illegal immigrant," yes?)

7

Re: Sending Money Home Costs Too Much, According t

ckm.

Sat Aug 11, 2007 at 04:20:33 PM EST

4.00 (astute)

That's a great point.  

Complaining that the company that helps YOU send money OUT of the community doesn't reinvest it's profits IN the community.  How about YOU reinvesting YOUR profits in the community?

Pot. Kettle. Black.

8

Up From 2004, But Down From 2006

thefadd.

Sun Aug 12, 2007 at 12:05:19 AM EST

4.00 (informative)

Maybe immigrants are starting to put the money back in their local communities. The Inter-American Development Banks says that sending money back to Mexico is down in 2007.

It is easy to buy small plaster models of what you think life is like.

1

Western Union = Odd Duck

thefadd.

Thu Aug 09, 2007 at 05:05:28 PM EST

none

There was awhile when an ex of mine had just moved to NYC. When she was in LA, she would frequently depend on me for a quick cash infusion of a couple hundred bucks and this habit was hard to break, her not knowing anyone in NYC and still getting herself established. So for a period of a few months, I was using western union quite a bit, which for me meant maybe five or six times during that period. In any case, I got used to it and they were charging about $14 send however much it was I was sending. Only sometimes, they would try to charge me $16. Once, I argued with the person on the phone for five minutes, certain I had paid $2 less to send the same amount less than a month before. I was assured that this had been the rate for quite some time. Finally I learned just to hang up and call back until I got someone charging me only $14. Without fail. So all I have to say is that's one weird ass company. I understand they need to cover fraud and they're providing a service to individuals they likely have over the barrel but it still feels like they could make do with a lower transaction fee. At least $2 lower.

It is easy to buy small plaster models of what you think life is like.

4

^ 1

Re: Western Union = Odd Duck

3fingerspointback.

Fri Aug 10, 2007 at 04:33:07 PM EST

4.00 (funny)

...an ex of mine...a quick cash infusion of a couple hundred bucks...maybe five or six times...

Dude, forget about the $2.  If you wanted to save some money, I can think of a quick way you could have saved about a thousand dollars over the same period of time.

(is 3fingerspointback)

5

^ 4

Re: Western Union = Odd Duck

thefadd.

Fri Aug 10, 2007 at 06:13:16 PM EST

none

well, she paid me back including the charges each time like i knew she would so not much skin off my back. had it gone on any longer, I was going to make her sign up for paypal. On $400 even their charges still come out to $12 so I don't know how out of line western union can be.

It is easy to buy small plaster models of what you think life is like.

2

^ 1

Re: Western Union = Odd Duck

pO157.

Thu Aug 09, 2007 at 06:25:57 PM EST

none

As one of the commenters informed us in a link above, the rate has supposedly dropped over the years as the costs of running this type of business drop. In addition, as this type of industry has "wide margins" its likely more competitors will move in, and thus drive prices down further.

I really don't see a need for regulation at this time. $20 doesn't seem bad considering they are sending cash across the continent to some 3rd world country within a period of hours.

3

^ 2

Re: Western Union = Odd Duck

thefadd.

Fri Aug 10, 2007 at 12:29:10 AM EST

none

within a period of hours

Just so there's no doubt, this is quite dependent on the customer service and availability of funds with your local dispensary. A lot don't keep much cash on hand or are just jerks who don't want to give it to you.

It is easy to buy small plaster models of what you think life is like.

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