Walmart Sued by FTC for Facilitating Fraudulent Money Transfers

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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.

DDGhttp://dannydealguru.com
Based in NYC. Points/miles enthusiast for years and actively writing about it for the last 6+ years at Danny the Deal Guru. I'm always looking out for deals. Making a few bucks is always nice, but the traveling is by far the best part of this business.

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    • Hopefully not; there is a tangential theoretical connection, but not a direct one.

      The Federal Trade Commission is suing Walmart for sitting by while scammers bilked customers out of more than $197 million, the agency alleged in a statement on Tuesday. It’s seeking a court order that would force Walmart to give money back to customers, on top of civil fines.

      In a brief response, Walmart described the lawsuit as both “factually flawed and legally baseless.”

      Money transfer scams are widespread, and they can involve everything from promises to share an inheritance to lies about a family emergency. They happen just about everywhere, from Zelle, Venmo and Cash App to crypto ATMs and popular dating apps.

      In this case, the FTC alleges that Walmart “turned a blind eye to fraud” that went down inside its stores. The retail giant offers money transfer services under in-house brand names, such as Walmart2Walmart. Between 2013 and 2018, the FTC claims that Walmart failed to protect its customers in several ways, including by failing to train its staffers and using “procedures that allowed fraudsters to cash out at its stores,” the agency said.

      The lawsuit follows earlier FTC fraud allegations against two of Walmart’s money-transfer partners, MoneyGram and Western Union; both reached hundred-million-dollar settlements with the agency in recent years.

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