Western Union Agrees to Settle TCPA Class Action Case for $8.5 Million

Western Union Co. has agreed to pay $8.5 million to settle a Telephone Consumer Protection Act (TCPA) class action alleging that it sent unsolicited text messages.

Case Background/Summary

On March 12, 2014, Plaintiff filed his Class Action Complaint against Western Union seeking to represent a proposed class of all individuals or entities who allegedly received unsolicited text messages to their wireless telephones from or on behalf of Western Union without prior express written consent in violation of the TCPA.

Western Union denied liability and contended that it had a number of affirmative defenses that would defeat Plaintiff’s claim:

First, Western Union contended the claims were subject to arbitration, claiming the text messages were sent to people who had registered for an online account with Western Union and thereby agreed to Western Union’s Terms & Conditions, which required any dispute arising from or relating to the use of Western Union’s services to be submitted to arbitration.

Second, Western Union’s account Terms and Conditions also included a class action waiver.

Third, Western Union contended that it obtained the requisite consent from potential class members, like Plaintiff, to be called (or, as in this case, to be sent text messages).

Finally, Western Union asserted that the equipment used to send the text messages at issue did not qualify as an automatic telephone dialing system (ATDS) and that Western Union was not liable because a third party sent the text messages.

The parties utilized mediation as part of the settlement discussions.

The Settlement

Under terms of the settlement agreement, filed in the U.S. District Court for the Northern District of Illinois, Western Union agrees to pay the settlement amount of $8.5 million (minus administrative costs and attorney’s fees) to a potential class consisting of 823, 472 potential members.

The settlement outlines the following relief:

1. Each Settlement Class Member who submits a Valid Claim, shall receive one pro rata share of the $8.5M Settlement Fund, after the Notice and Administration Costs (approximately $240,000) Plaintiff’s requested Attorneys’ Fee Award (35% of the Fund, approximately $2,891,000) and Incentive Award (approximately $5,000) have been deducted from the Settlement Fund (the “Net Settlement Fund”).
2. Assuming the Net Settlement Fund is $5,364,000, Class Counsel estimated that if 1%, 3%, or 5% of Class Members submit Valid Claims, each said Class Member will receive approximately $651.37, 217.12, or $130.28 respectively.

insideARM Perspective

This is a significant settlement in light of the potential defenses available to Western Union. In spite of the potential defenses, Western Union still agreed to pay $8.5 million to make the case go away.  The settlement highlights the potential exposure inherent in TCPA class action litigation as well as the significant costs to defend the cases.