FTC Sues Walmart for Facilitating Money Transfer Fraud

Federal Trade Commission

WASHINGTON, D.C. — Walmart has been sued by the Federal Trade Commission for facilitating money transfer fraud. The FTC alleges that Walmart turned a blind eye to fraud, and as a result, consumers were scammed out of hundreds of millions of dollars. This is not the first time Walmart has been in hot water over its money transfer services – in fact, this is the third such lawsuit filed against the company.

The Federal Trade Commission filed a lawsuit against Walmart on June 28, 2022, alleging that the company failed to properly protect its customers from scammers. The FTC alleges that for years, Walmart turned a blind eye while scammers took advantage of its money transfer services. The company did not properly train its employees, failed to warn customers, and used procedures that allowed fraudsters to cash out at its stores, according to the FTC’s complaint. The FTC is asking the court to order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations.

This is not the first time Walmart has been accused of failing to protect its customers. In 2015, the company agreed to pay a $1 million penalty for allowing scammers to sell fake products on its website. And in 2018, it agreed to pay $160 million to settle allegations that it sold products that were falsely advertised as “Made in the USA.” The company has also been accused of putting pressure on its employees to meet unrealistic sales goals, leading to fraud and abuse.

According to Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, Walmart has been complicit in allowing scammers to make off with millions of dollars through its money transfer services. Levine alleges that while consumers have lost hundreds of millions of dollars, Walmart has continued to pocket fees without taking any responsibility for the fraud. The Commission is now taking action to hold Walmart accountable and prevent further consumer harm.

READ:  FTC Shuts Down Credit Card Relief Scheme

According to the complaint, Walmart processes tens of millions of money transfers each year. The company offers its own services, like “Walmart2Walmart” and “Walmart2World,” as well as acting as an agent for multiple money transfer services, including MoneyGram, Ria and Western Union. Walmart employees handle the processing of these transactions. The complaint alleges that Walmart has been charging customers hidden fees for these services, in violation of federal law. As a result, the company has collected tens of millions of dollars in unlawful fees. The lawsuit seeks to recover these ill-gotten gains and to put an end to Walmart’s illegal practices.

Money transfers are a popular way for people to send money to loved ones who live in another country. However, these services are also frequently used by fraudsters to commit scams. Once the money has been transferred, it is very difficult to retrieve, making it an attractive option for criminals. In recent years, the Federal Trade Commission has taken action against several money transfer services, including MoneyGram and Western Union, alleging that they have failed to protect consumers from fraudulent activity. These cases highlight the importance of being cautious when using money transfer services. If you are not careful, you could be the victim of a scam.

In recent years, Walmart has come under fire for its role in enabling fraud. The complaint cites numerous instances in which law enforcement investigations found that scammers relied on Walmart money transfers as a primary way to receive payments, including in telemarketing schemes like IRS impersonation schemes, relative-in-need “grandparent” scams, sweepstakes scams, and others. Based on information from fraud databases maintained by MoneyGram, Western Union, and Ria, from 2013 to 2018 more than $197 million in payments that were the subject of fraud complaints were sent or received at Walmart, with more than $1.3 billion in related payments also possibly connected to the fraud. As the world’s largest retailer, Walmart has a responsibility to take steps to prevent its stores from being used to facilitate fraud. However, the company has repeatedly failed to do so, with devastating consequences for consumers. It’s time for Walmart to take action to protect its customers from being victimized by scammers.

READ:  Pennsylvania Attorney Sentenced for Defrauding Clients

The Federal Trade Commission’s investigation of Walmart’s money transfer practices showed that the company was allowing the payout of suspicious transfers, had no anti-fraud policy or an ineffective, poorly enforced policy, allowed cash pickups for large payments, did not provide materials to prevent consumers from sending fraudulent payments, failed to effectively train or retrain staff, and allowed money transfers to be used for telemarketing purchases. The FTC’s investigation also showed that Walmart was not providing customers with refunds for fraudulent transactions, and that the company had failed to take action against repeat offenders. Walmart has since agreed to change its money transfer practices and improve its training and policies to prevent future incidents of fraud.

The Commission vote to file the civil penalty complaint was 3-2, with Commissioners Noah Joshua Phillips and Christine S. Wilson dissenting. The FTC filed the complaint in the U.S. District Court for the Northern District of Illinois.

For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News.

Thanks for visiting! Looking for some Chester County pride? We got you covered! Shop our MyChesCo store and show your love for Chester County, Pennsylvania. We got shirts, hats, and more – all with a unique ChesCo flair. Plus, proceeds from each purchase helps support our mission of bringing reliable information and resources to the people of Chester County.