Jun 29, 2022 - News

Federal Trade Commission sues Walmart

A photo of Walmart's Home Office.
Photo: Worth Sparkman/Axios

The Federal Trade Commission filed a lawsuit against Walmart on Tuesday alleging the company allowed scammers to use its money transfer services.

Why it matters: Walmart's financial services include money transfers, credit cards, reloadable debit cards, check cashing and bill payments. They are used frequently by the underbanked — including immigrants and people with low incomes.

Details: The complaint claims investigations found that fraudsters relied on Walmart money transfers to receive payments from telemarketing schemes, relative-in-need "grandparent" scams and sweepstakes stings.

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," Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a news release.

The other side: "A narrowly divided Federal Trade Commission brought this factually flawed and legally baseless civil lawsuit after the Chair refused Walmart the due process of hearing directly from the company, and even the Justice Department refused to take this case to court," the company's corporate statement reads.

What to watch: Walmart said it has robust anti-fraud efforts in place and will aggressively defend itself.

Disclosure: Reporter Worth Sparkman is a Walmart shareholder.

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