Following a consumer complaint filed against Bermuda Financial Network’s (BFN) Western Union outlet, the Bermuda Monetary Authority (BMA) has confirmed that the company will be “making arrangements for all monies ‘stuck in their system’ to be returned to their rightful owners”.
This after a concerned resident filed a formal complaint to the BMA and Consumer Affairs, demanding action as the regulator of licensed financial service providers in Bermuda.
Dr Eugenie Simmons, who copied her letter to Bermuda Real, complained that BFN refused to honour thousands of dollars in verified wired cash transfers sent to her through Western Union.
She also expressed concern “that the BMA would license a financial establishment without ensuring that it could honour its financial obligations to the public”.
Western Union’s system went offline earlier this month. The software needed to upgrade the system was due to arrive from Miami, but that plan was cancelled out by Hurricane Irma. Dr Simmons was one of several customers unable to secure payment as a result of the problem for weeks.
When contacted by Bermuda Real, a spokesman for the BMA said discussions were held “with the licensee and with Western Union International who confirmed that the system, due to compliance failings, would be down until further notice and that they would be making arrangement for all monies ‘stuck in the system’ to be returned to their rightful owners”.
“BMA is the supervisor and regulator of Money Services Businesses in Bermuda,” he said. “Individual product offerings like the Western Union money transmission system are contractual agreements signed by the licensee in pursuance of the activities outlined in their business plan.”
But he said: “The choice of the provider on whether they provide that specific service at all is a matter for the licensee. The licensee, in addition to the Western Union business, carries out a range of other money service activities for the public.
“In this case, as a result of the BMA’s action Western Union provided more clarity on Western Union’s Services not being available in Bermuda as well as confirmation they would be contacting recent senders to facilitate returning monies (stuck in the system).”
When asked for her initial reaction to the BMA’s response, Dr Simmons said: “I am happy to know that the BMA has intervened with Western Union to ensure that senders who wired money to the Bermuda location will be reimbursed.
“It is an inconvenience for me and other persons to have to contact overseas senders to have these outstanding funds re-routed via other payout mechanisms, but I am happy to know that I will be receiving my funds eventually.”
But she said: “I do believe that in light of what has occurred that stronger regulations are required with respect to BMA licensees and third party vendor arrangements.
“I really had no idea when first raising this issue with the BMA and when raising my concerns in the public domain that it was of such critical proportions,” she said.
“I am still confused as to why BFN was not forthright from the beginning and they continued to release misleading and inaccurate information to the public with regards to what was actually happening with person’s payments and the state of their system. The misinformation resulted in me and other users to continue to have money routed to BFN Western Union Bermuda thereby compounding the backlog of monies owed to person’s locally.”
While waiting for a response to her complaint, she noted after speaking with several other Airbnb hosts like herself, she said: “It would appear monies owed by BFN to Airbnb hosts runs into tens of thousands of dollars or even more.
“One host has in excess of ten thousand dollars tied up in BFN that they cannot get access to! Some persons have reported being unable to receive backlogged funds for a month or longer.”
Moving forward, she said: “There’s a few banks – including mine, that actually have direct deposit fees that are lower than BFA/Western Union, so there is no need to do business with them going forward.”