Walmart Sued by FTC for Facilitating Fraudulent Money Transfers
The Federal Trade Commission sued Walmart alleging the retailer allowed its money-transfer services to facilitate fraud. The complaint was filed in U.S. District Court for the Northern District of Illinois.
The lawsuit says that for years, the company “turned a blind eye while scammers took advantage of its failure to properly secure the money transfer services” offered at its stores. The company did not properly train its employees, failed to warn customers, and used procedures that allowed fraudsters to cash out at its stores. The agency said Walmart was aware that scammers were using its systems illegally and didn’t do enough to stop it.
“Walmart looked the other way and pocketed millions in fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
Between 2013 and 2018 over $197 million in payments sent or received at Walmart were the subject of fraud complaints, it said. The FTC is asking the court to order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations. The five-member commission voted 3-2 in favor of filing the civil penalty complaint.
Walmart in a statement said the lawsuit was “factually misguided and legally flawed,” and said it would fight it. “It was approved by the FTC by the narrowest of margins after Chair Lina Khan refused Walmart the due process of hearing directly from the company, and then the Department of Justice refused to take this case to court.”
“The FTC is trying to blame the Company for actions by third parties, including fraud the FTC has already acknowledged was caused by another company,” Walmart said in the statement.