More than 15,000 people - a quarter of the population of Bermuda - are eligible for a part of a $47.5 million class action settlement in the United States against Western Union.

The local users of Western Union's money transfer facility have been sent notices of the settlement - but are unlikely to get huge payouts as overall 17.9 million letters have been sent to former customers from around the world. (See story on Page 25)

Western Union said yesterday it had sent out 15,714 settlement letters to Bermuda addresses, but warned that some may be duplicates - so the number eligible may in fact be less.

"It is one person one claim, I am afraid," said Danielle Jimenez, spokesperson for Western Union. "But in terms of how much of the total purse that will be is impossible to say."

But she said that in order to be eligible to be part of the settlement, former customers had to get a copy of the claim and be registered.

The original lawsuit was filed on January 19, 2001, in the United States District Court for the Eastern District of New York and accused Western Union of violating federal and state law by making misrepresentations or failing to disclose it received a more favourable exchange rate for converting US dollars to foreign currency and foreign currency to US dollars than what it provided to customers. The suit alleged Western Union's misrepresentations or non-disclosures occurred in its advertisements and affected customers every time they carried out a transaction with the company.

Settlement has also been reached with service providers Orlandi Valuta and First Data Corporation, against whom similar litigation was lodged.

The dates for the money transfers in question are between January 1, 1995 and December 31, 2002. Western Union closed in Bermuda in October, 2002 after Capital G Bank severed ties with the company.

Senior Judge Charles Sifton in March gave preliminary agreement to a proposed worldwide settlement that would see millions of dollars in discount coupons being made available to between five to seven million people in the United States and 80 other countries.

The settlement also specified that Western Union would place an agreed upon disclosure statement regarding currency exchange on "send forms" or receipts and their price-related advertisements for money transfers. The lawsuit states that "...the defendants [made misrepresentations about or otherwise failing to disclose to customers the fact that they received a more favourable exchange rate for converting US dollars to foreign currency and foreign currency to US dollars than they provided to their customers."

Following the closure of Western Union in Bermuda there was sudden drop in suspicious activity reports to money laundering detectives.

The head of the Police Financial Investigation Unit, Det. Insp. Gary Wilson, said the drop from 257 to 2,570 was due to the closure of Western Union.

He said that money transfers are used by local drug traffickers as a way of laundering money which is then brought back into the country at a later date.

Western Union still has no offices in Bermuda following the closure, and the telephone number listed in Bermuda states they are closed and looking for new partners.

The class action settlement is due to be heard in court in the US on April 9, 2004 at 10 a.m., but all claims have to be in by February 9, 2004.