The Tenth Circuit Court of Appeals has rejected objections to a $133 million settlement between The Western Union Co. and class action Plaintiffs. The company was accused of keeping money from failed wire transfers for five years despite having senders’ contact information. The appellate court said it was not unsympathetic to the arguments raised by two objecting class members claiming the settlement was unfair, particularly the fact that the named Plaintiffs have already received refunds, so the unreturned money funding the settlement, which includes $40.57 million in attorneys’ fees as well as incentive awards, actually belongs to the other class members. The 10th Circuit said:

Through the settlement, class members will recover interest for the time during which Western Union held these funds, something they would not have received simply by asking Western Union to return their money.

The appellate court also noted that without the settlement, Western Union wouldn’t have had any incentive to change its business practices, which it agreed to amend by informing customers when their transfers fail. The suit stemmed from Western Union’s practice of keeping money from failed transfers and earning interest, electing not to inform customers until their money was due to be absorbed by states’ unclaimed and abandoned property departments. The Plaintiffs said Western Union waited so long that the contact information it had on file was often incorrect by the time it finally sent notice.

Many of the class members are immigrants who sent money to family members. Western Union has changed its policy, which was described as “a reprehensible business practice,” and that’s certainly an appropriate description.


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