Bulletins

The FTC says Walmart turned a 'blind eye' to money transfer fraud

In a lawsuit, the regulator said it found several instances where scammers used Walmart's money transfer services for payment.

Walmart

Nearly $200 million in payments subject to fraud complaints was sent or received at Walmart from 2013 to 2018, according to the FTC.

Image: Mike Mozart / Protocol

The Federal Trade Commission has sued Walmart, alleging the retail giant "turned a blind eye" to fraud worth hundreds of millions on its money transfer services.


The lawsuit, filed Tuesday in Illinois Federal Court, says that Walmart did not properly train employees or put procedures in place to prevent fraud on transfer services offered within its stores, despite being aware of the risk for fraud. Nearly $200 million in payments subject to fraud complaints was sent or received at Walmart from 2013 to 2018, according to the FTC, citing fraud databases maintained by MoneyGram, Western Union and Ria. Another $1.3 billion in related payment could be tied to fraud, according to the FTC.

“While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.

The FTC said it found several instances where scammers relied on Walmart's money transfers as a primary way to receive payments. That includes in telemarketing scams, IRS impersonation schemes, relative-in-need “grandparent” scams and sweepstakes scams, among others. Walmart offers transfers directly and through partnerships with MoneyGram, Ria and Western Union.

The FTC noted in the release that it has previously pursued cases against money transfer services alleging a failure to protect consumers from fraud, including against MoneyGram and Western Union.

In a statement published shortly after the FTC announced the case, Walmart called the complaint "factually flawed and legally baseless."

"Claiming an unprecedented expansion of the FTC’s authority, the agency seeks to blame Walmart for fraud that the agency already attributed to another company while that company was under the federal government’s direct supervision," Walmart's statement said. "Walmart will defend the company’s robust anti-fraud efforts that have helped protect countless consumers, all while Walmart has driven down prices and saved consumers an estimated $6 billion in money transfer fees."

The FTC said it will ask the court to require that Walmart return money to customers and impose civil penalties against Walmart.

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