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NARR: Fidelis Kahuo, a security guard, shares a neat basement apartment with his wife in Orange, New Jersey. Each month, he wires a minimum of $600 to his family in Cameroon. At times, he has sent up to $3,000 a month depending on what his family needs back home. Companies like Western Union have charged him up to 10% of the amount in fees.
ACT: Fidelis Kahuo: 15 seconds: Sending six, eight, or one thousand dollars every month was more than a hundred dollars fees. So if I have to do that transaction three times, it was, let's say about three hundred dollars.
NARR: Agencies like Western Union earn money from fees per transaction. But they also have another way of making money. Jessica Rucell, the New York area's regional coordinator for TIGRA, the Transnational Institue for Grassroots Research and Action, explains.
ACT: Jessica Rucell: 5 seconds: They not only charge high fees, they're also making money off the exchange rate.
NARR: For example, on Kahuo's last transfer, Western Union's exchange rate was almost 4% lower than the official one. The lower exchange rate allows money transfer companies to earn a greater profit at the expense of the customer. In September, TIGRA organized a boycott of Western Union due to their high fees. Rucell describes the three main changes they would like the company to make.
ACT: JESSICA RUCELL: 6 seconds: To lower their fees, to charge a fair exchange rate and to reinvest in communities that they're profiting from,
Some Western Union shareholders are also pressuring the company to reinvest in the communities they serve. Their resolution asks that the company use the same community reinvestement standards used by banks. Julie Goodridge of the Boston based investment group North Star Asset Management, who drafted the resolution, explains that Western Union often performs similar functions to a banking institution.
ACT: JULIE GOODRIDGE: 18 Seconds: You know, this is the closest many of these folks, especially the people who are receiving the money are gonna get to having a bank account. Why can't we ask Western Union to live up to the same criteria that regular money center banks have to live up to?
NARR: In response to these criticisms, Western Union started the "Our World, Our Family" program last fall. According to a press release, the $50 million initiative seeks to, "empower migrant families through education and global economic opportunity." Organizers hope that the boycott and the stockholder resolution will force Western Uniion to increase their commitment. With 350,000 locations around the world, they are by far the biggest money transfer agency. A change in their policy could bring about broader changes in the industry.
Kahuo keeps sending money to Cameroon. The money he sends is his family's main source of income.
ACT: FIDELIS KAHUO: 13 Seconds: Absolutely that's the only money that they have. My parents, they are retired, my wife doesn't work, and my children… brothers and sisters, don't work at all. So that is their main source to survive.
He recently completed a course in construction to earn more money to send home. He hopes to bring his children from Cameroon to live with him in New Jersey soon.
Rafael Cohen, Columbia Radio News