Appellate Court Upholds Western Union Wire Transfer Class Action Settlement

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The Tenth Circuit Court of Appeals has rejected the two remaining objections to the $133 million Western Union wire transfer class action settlement.

While the court did acknowledge some sympathy for Class Members Sikora Nelson and Paul Dorsey, who both objected to the class action settlement, the appellate court upheld the decision by the lower federal court, approving the settlement.

Nelson and Dorsey objected to the terms of the Western Union class action settlement because they believed that the class representatives could not represent all class members adequately, that the settlement was not fair “because it uses primarily the money belonging to the class to fund the settlement,” and because the lower federal district court “did not adequately notify absent class members of the class action and the settlement.”

However, the three judge panel concluded “that their objections lack merit,” adding that the appellate court is “not unsympathetic” to the objections.

“The settlement is primarily funded by money that everyone agrees belongs to some of the absent class members like Nelson,” the panel of three judges explains. “The named Plaintiffs, who do not own any of this money, negotiated a settlement that gives almost one-third of this fund to their attorneys and further uses this money to pay themselves incentive awards, all class administrative costs, and interest to themselves and class members like them for the time Western Union held their funds.

“Western Union uses this fund, which it does not own, to negotiate a release of all class members’ claims against it stemming from its retention of their money without telling the class members that their wire transfers failed,” the judges explain further.

“Western Union also gets to keep all of the administrative fees it charged its customers for holding their money, approximately $29 million, and most of the $19 million in interest it earned using its customers’ unclaimed money,” and “Western Union itself only has to pay interest to those class members whose property has already escheated to a state,” the judges wrote.

“Nonetheless, Nelson’s claim of unfairness is ultimately unpersuasive. First, even though all Nelson had to do to reclaim her money from Western Union was to ask for a refund, it is likely that, without notice of this class action, Nelson and most other similarly situated class members would not have known that Western Union was holding their money,” according to the ruling.

“And 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,” they contend.

“Further, without this class action, Western Union would have had no incentive to change its business practices,” the judges add.

The Western Union wire transfer class action settlement was approved on June 25, 2013 by the federal district judge, but the claim form deadline was delayed due to the appeals of several class members who objected to the terms of the settlement.

This decision should result in an extension of the claim form deadline 180 calendar days following this May 1 ruling. The estimated claim form deadline is Oct. 28, 2015. However, as of this writing, there is still no new claim form deadline posted on the settlement website. For more information on how to file a claim, please visit  Top Class Actions’ Western Union Money Transfer Class Action Settlement page.

The payout for Class Members on this Western Union class action settlement varies. For those who have unclaimed funds from money transfers, they are entitled to receive lump sum cash refunds and interest that Western Union earned on that amount held by Western Union, with the administrative fees subtracted. For those whose funds were escheated, which happens when unclaimed property is given to states, according to specific state laws, those Class Members will receive only a lump sum cash payment of the interest earned by Western Union.

The Western Union wire transfer class action lawsuit stems from allegations that when wire transfers failed, it did not provide adequate notice to customers of the unredeemed money from their transactions.

This allegedly took place even though “Western Union usually knows within minutes if a wire transfer fails, [and] the sending customer is often unaware that his wire transfer failed and so does not know to ask Western Union to return his money. And Western Union, although possessing its customer’s contact information, does not notify the customer that his wire transfer failed.”

The plaintiffs are represented by Richard J. Burke, Jeffrey A. Leon and Jamie E. Weiss of Quantum Legal LLC, Jimmy Spurlock Calton Jr. of Calton Legal Services, John M. Agnello and James Edward Cecchi of Carella Byrne Cecchi Olstein Brody & Agnello PC, Seth A. Katz of Burg Simpson Eldredge Hersh & Jardine PC, Christopher Adam Seeger of Seeger Weiss LLP and Mitchell Baker.

Western Union is represented by Geraldine Mary Alexis, Jess Alexander Dance, Leonard Hawkes MacPhee and Jason A. Yurasek of Perkins Coie LLP and Thomas M. Barba, Charles Glaston Cole and Laura Lisa Sandoval of Steptoe & Johnson LLP.

Nelson is represented by John E. Anding and Theodore James Westbrook of Drew Cooper & Anding.

The Western Union Wire Transfer Class Action Lawsuit is Tennille, et al v. Western Union, et al, Case No. 13-1310 in the U.S. Circuit Court of Appeals for the Tenth Circuit.