Saturday, September 09, 2006

Western Union paid $3M penalty to Arizona regulators

According to this article.
Concerned about illegal immigration and other smuggling activities, Arizona officials in recent years have stepped up their scrutiny of financial institutions.
In 2004, a new state law made it easier for state prosecutors to seize money paid to migrant smugglers through money transfers.
Rotellini said the department, working with attorney general's investigators, found that Western Union and its agents collected hard-to-read or otherwise unusable information on the identity of senders or receivers of money transfers at some locations.
Also, Western Union's record-keeping was lax and the company did not properly supervise its agents as required by the state.
"We will have a zero tolerance for those transmitters who are facilitating illegal immigration by failing to comply with the GTO and Arizona law," Rotellini said in a statement.

Update: Western Union fighting back Arizona regulators, Bloomberg news reports:
The seizure warrant mandated the funds be held in a ``detention account'' for review before being sent on to recipients in Sonora, according to Western Union's Sept. 22 filing with the U.S. Securities and Exchange Commission. The company said in a Sept. 19 federal court complaint that Arizona had seized money before, and then ``interrogated'' senders and recipients.
Customers Fingerprinted
First Data said in July that U.S. proposals to tighten immigration rules cut Western Union's revenue from migrant workers, who feared authorities might use money-transfer records to track them down. Gold said today customers in Arizona who received $500 or more from nine states were fingerprinted by authorities at the company's stores, under a previously issued warrant by Goddard's office.
``The real issue is they have put a seizure on any transaction over $500, and that's assuming that something is wrong with every transaction,'' Gold said. ``It's really problematic for us, because our brand is all about trust, convenience and reliability. Our consumers really don't understand why if you send a transaction from California to Mexico, you'd have to call the attorney general in Arizona first.''

No comments: