Western Union 2013 Annual Report Download - page 149

2013 FORM 10-K
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The changes in WUFSI’s anti-money laundering program required by the Settlement Agreement, including the Amendment,
and the Monitor’s recommendations have had, and will continue to have, adverse effects on the Company’s business, including
additional costs. Additionally, if WUFSI is not able to implement a successful anti-money laundering compliance program along
the U.S. and Mexico border or timely implement a substantial portion of the Monitor’s primary recommendations, each as
determined by the Monitor, pursuit by the State of remedies under the Settlement Agreement, including the Amendment, could
have a material adverse effect on the Company’s business, financial condition or results of operations.
We are in the process of making or have made certain changes to our compliance program for transactions from the United
States to Mexico and the Latin America and the Caribbean region, including:
• revisions to agent agreements to increase our ability to oversee the compliance of our agents and their subagents;
• reduced thresholds at which our consumers are required to provide identification for transactions from certain states along
the United States southwest border; and
• enhancement of our information systems including migrating customer information for our Orlandi Valuta and Vigo
brands onto our Western Union database and migrating to a standard point of sale system.
Such changes have had, and will likely continue to have adverse effects on our business, primarily our United States to Mexico
business and our United States to Latin America and the Caribbean business. Such adverse effects include fewer transactions,
lower revenue, lower profits, increased compliance costs, loss of agents, reduced ability to attract or activate new agents, and a
less desirable customer experience. Any additional changes that we elect or are required to make in the United States to Mexico
and the United States to Latin America and the Caribbean corridors, or similar changes that we may elect or be required to make
in other corridors or for our other services, could have a material adverse effect on our business, financial condition and results of
operations.
Over the past several years, we have entered into consent agreements with federal and state authorities, including FinCEN,
the New York Department of Financial Services, the California Department of Financial Institutions and the Arizona Department
of Financial Institutions, relating to the BSA and anti-money laundering requirements and related consumer identification matters.
These agreements required us to make various payments and to take certain measures to enhance our compliance with recordkeeping,
reporting, training and agent oversight requirements under applicable state and federal law.
The consent agreements with the New York Department of Financial Services and the California Department of Financial
Institutions were lifted during 2008. However, the financial services industry and businesses like ours continue to be under
significant federal and state regulatory scrutiny with respect to the BSA and anti-money laundering compliance matters. It is
possible that as a result of periodic examinations or otherwise, we could be subject to deficiency findings, fines, criminal penalties,
asset seizures or enforcement actions that could adversely affect our business, financial condition and results of operations.
In 2011, 2012 and 2013, Western Union received Civil Investigative Demands from certain state attorneys general who have
initiated an investigation into the adequacy of the Company's consumer protection efforts over the last several years. The Civil
Investigative Demands seek information and documents relating to money transfers sent from the United States to certain countries,
consumer fraud complaints that the Company has received and the Company's procedures to help identify and prevent fraudulent
transfers. Due to the stage of the investigation, the Company is unable to predict the outcome of the investigation, or the possible
loss or range of loss, if any, which could be associated with any possible civil claims that might be brought by one or more of the
states. Should such claims be brought, the Company could face significant fines, damage awards, or regulatory consequences, or
compulsory changes in our business practices that could have a material adverse effect on our business, financial condition and
results of operations.