We all have bad things to say about WU

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Posted: Fri Dec 31, 2010 1:02 am

And I think that sometimes we forget that it has its legitimate uses, and it is a lifeline for expatriate workers sending funds home to their families - sometimes the only way for them to do so. Yes, they could be more vigilant, and their verification procedures suck, but is there any need for them to take up to 20% in charges from the people (often at the bottom of the financial heap) using the service?

http://www.avaaz.org/en/make_giving_powerful/

This is the mail I got from Avaaz, whom I genuinely believe are Good People:

Quote:

This holiday season, Josh, a Kenyan student in the Netherlands, scraped together a year's worth of savings and sent it home to support 10 struggling family members. Shockingly, the giant money transfer company Western Union skimmed off 20% of the cash meant for Josh's family in fees.
Josh’s story is painfully retold every day, the world over, on a staggering scale -- an estimated $44.3 billion worldwide was lost in transfer fees last year! The World Bank recommends that transaction costs not exceed 5% of the total, but Western Union has never faced serious pressure to lower its crippling charges. If we unite in a global outcry now, we can expose its predatory practices when its carefully crafted, family-friendly image is most vulnerable: the giving season.
Josh's generosity -- and that of millions of workers around the world -- shouldn't go to waste! Let's call on Western Union to lower its fees to 5% for the poorest countries, and when the petition reaches 250,000 we’ll deliver it to the company’s image-sensitive board of directors. Sign now and then forward this to friends and family:
https://secure.avaaz.org/en/make_giving_powerful/?vl
Sacrifices like Josh’s dwarf foreign governmental aid every year and provide a vital lifeline to the world’s poorest economies. Slashing the obscene profits of companies like Western Union would dramatically increase assistance flowing into developing countries. Instead, families around the world received far less than they deserved so that Western Union's CEO could take home $8.1 million in 2009.

Posted: Fri Dec 31, 2010 1:20 am

I disagree. People choose to send money through Western Union and then complain about the charges after they have sent the money. Nothing more than buyer's remorse.

Nobody is forced to use WU and/or denied the right to set up, maintain and balance a bank account, that I'm aware. I might change my opinion on the matter if anyone can prove otherwise.

Just like using UPS or FedEx as opposed to the postal service. Nobody is forced to use FedEx or UPS and denied access to the post office. People use UPS/FedEx for a reason, and always by choice.

Posted: Fri Dec 31, 2010 1:26 am

Bank accounts aren't always an option in some countries or locations. There are still quite a few places, I believe, where banking as we know it in the West is not a viable alternative. It may also be that there are reasons for the sender not to have a bank account (language skills or lack of legal residence status, etc. that would prevent a bank transfer from taking place) If these cheaper options existed, I am sure that the migrant workers would take advantage of them.

Posted: Fri Dec 31, 2010 2:23 am

We're not talking about "some countries", we're talking about the Netherlands and Josh, a Kenyan student (obviously not a business or economics major), who had scraped together year's worth of savings to send home. I've never been to the Netherlands, but I'm fairly confident that they have banks there. Wink

They never mention how much money Josh transfered, but for discussion, let's say it was $1000. It cost him $200 dollars to get $1800 to his family, in the amount of time that it takes to left-click a mouse. Literally.

Rather than whinge and complain that it costs too much to facilitate that kind speed and simplicity of service, those that must use WU should be thankful that it is available, when other means of money transfers are not. The other option (in this scenario) is to personally travel to wherever they want to transfer the money and deliver it in person. That option is costly, inconvenient and according to avaaz.org's flawed philosophy, would allow the company providing said means of transport to "make billions of dollars in profit on the backs of the world's neediest."

ETA> Since this really has nothing to do with baiting, I'm moving it to GC.

Posted: Fri Dec 31, 2010 2:37 am

Thanks for moving it to where it should have been in the first place.

Let's agree to disagree on this one...

Posted: Fri Dec 31, 2010 3:31 am

One does have to be careful with WU. A friend called the 1-800 she had for WU and sent some money to a friend's niece using her credit card. Ultimately she found out that was a fake 1-800 number (even though it was in the telephone book). We kept telling her to wait and go to WU the next day, but it was late at night and she wanted to get the transaction over with.

Needless to say, she lost $500 and the real WU said there was nothing they could do for her.

Where I live, if you go to Wal-Mart on a Thurs or Fri, there is a long line at the MoneyGram counter with many alleged illegals sending money back to Mexico. They send huge amounts of money back home. They cannot get bank accounts because they have no driver's license nor social security numbers, so they depend on WU and MG.

Posted: Fri Dec 31, 2010 4:20 am

Well for the sake of argument I would say yes they have banks in the Netherlands but he sent the money to Kenya (assuming back home) where a bank transfer may have not been possible for the recipient. So the student had little choice more than likely.

However you cant really just blame WU. It is a shame WU has to prey on those with the least to loose but they are offering a service. If you do not have a bank account they offer an easy and convenient way to send money. Sure you pay an exorbitant amount but they are not advertising "The cheap way to send money".There tag line is "The fastest way to send money worldwide"

Just like pulling into a busy mall during Christmas I can battle to find a parking spot or I can pull up to valet and pay a premium but be in to carry on the torture of holiday shopping in minutes.

Edit: before anyone corrects me I'm sure they have a bank or two in Kenya but as the OP mentioned probably not in the since the Western world interacts with.

Posted: Fri Dec 31, 2010 9:16 am

bravo95 wrote:

Edit: before anyone corrects me I'm sure they have a bank or two in Kenya but as the OP mentioned probably not in the since the Western world interacts with.

There are several Western/International banks in Kenya and also ATM's but not every Kenyan has a bank account or debit (or credit) card of course. That's why many people have to use Western Union or MoneyGram.

In case you happen to need a pic of a Kenyan WU or MG office in your bait, PM me. Wink

By the way, the most popular way to transfer money in Kenya is M-Pesa. It has an agent in every corner all over the country. More information here:

http://www.safaricom.co.ke/index.php?id=250

Posted: Fri Dec 31, 2010 10:16 am

I have to agree with Bravo here. The recipient have to have an account too. And having been to Kenya myself i can say that many people does not have a bank account and very little opportunity to get one.
Kenya is not a particular poor country comparing to other African nations but as a developing country there are a lot of inequality. Yes there are ATM:s with guards with automatic rifles. But that is not something the people in Kibera have any use for as they have no money to but there.

But for arguments sake we can perhaps assume that the student in the Netherlands have the means to set up an account in Kenya for his family. It is not unrealistic and he is as he have the ability to study abroad he is definitely more well to do than most Kenyans. But there are still a few unanswered questions to address.
Can he set up an account in the Netherlands as he may not be a citizen of Holland?
How much does it cost to set up bank accounts? I don't know the cost but it most likely won't be free of charge in either countries. As long as there are services done there are gonna be charges for those services. And that cost have to be set against the WU fee.

In all there are to many variables to know if the student could have done something different. And bottom line it all comes down to services and charges for them. And Jose had a good point. If you are not willing to pay the prize, don't do it. And that is certainly something that the student knew.

Remittances is something that many people in poor countries depend on like Morgain pointed out. And the same rules apply for all cases.

Posted: Fri Dec 31, 2010 10:22 am

Dr Mike wrote:

Yes there are ATM:s with guards with automatic rifles.

Hehe, not all of ATM's though. But guards with automatic rifles are in many places in Kenya.

Posted: Sun Jan 02, 2011 7:21 am

Maybe he should have put the funds into an account with an ATM card attached and his family could withdraw 5,000$ usd per day... Laughing

Yes the Netherlands have banks. One Dutch company is doing a lot of acquiring small banks in the USA. It is pronounced as "rob a bank".

If this man was legally in the country he was studying in, he could have gotten a bank account. He also could do an international wire transfer for a small fee.

Opening a bank account usually has not fee to it. If there is a fee it is nominal. Many banks do charge a fee if you go below a predetermined balance in the account.

I had one bank charge a fee because I didn't use the account often enough. I closed the account! beating

That goes along with what Juan said. If you don't like the policies, don't use their services. banghead

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