Jun 28, 2022 - Economy & Business

FTC sues Walmart for allegedly allowing money transfer services for fraud

A shopping cart outside a Walmart store in Torrance, California.
A shopping cart outside a Walmart store in Torrance, California. Photo: Bing Guan/Bloomberg via Getty Images

The Federal Trade Commission Tuesday sued Walmart for allegedly allowing money transfer services to be used for fraud, saying the retail giant "turned a blind eye" costing consumers hundreds of millions of dollars.

By the numbers: From 2013 to 2018, more than $197 million in payments that were subjects of fraud complaints were sent or received from Walmart, according to data from MoneyGram, Western Union and Ria, the FTC said. Walmart has called the lawsuit baseless.

  • More than $1.3 billion in related payments may have been connected to fraud, per the FTC.

Details: The FTC said Walmart did not properly train employees, failed to warn customers and used procedures that allowed scammers to cash out at stores.

  • Scammers used Walmart money transfers to receive payments for relative-in-need “grandparent” scams, sweepstakes scams and more, the agency said.

What they're saying: “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, in a statement.

  • “Consumers have lost hundreds of millions, and the commission is holding Walmart accountable for letting fraudsters fleece its customers," he added.

The other side: Walmart said in a news release that the civil lawsuit was "factually flawed and legally baseless."

  • The retail chain said it would defend its anti-fraud efforts, which, Walmart said, saved consumers about $6 billion in money transfer fees.

What we're watching: The FTC has asked the court to order Walmart to return money to customers and impose civil penalties against the retail chain.

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