Walmart to Pay $10 Million Over Money Transfer Fraud Claims
Retail Giant Settles FTC Lawsuit Alleging Failure to Prevent Scams
Walmart is set to pay a substantial amount to resolve a federal lawsuit. The U.S. Federal Trade Commission (FTC) alleged that the retailer overlooked indications that fraudsters misused its money transfer services, ultimately swindling customers out of millions of dollars.
Settlement Details
The agreement, which necessitates approval from U.S. District Judge Manish Shah, was lodged in a Chicago federal court on Friday. The settlement also stipulates that Walmart must refrain from processing money transfers it suspects are fraudulent, including those related to deceptive telemarketing and sales practices.
Walmart will pay $10 million to settle an FTC suit alleging it turned a blind eye to fraudsters who used its money transfer services. https://t.co/3aB1c5zD6c
— The Wall Street Journal (@WSJ) February 3, 2024
“Electronic money transfers are one of the most common ways that scammers tell consumers to send them money, because once it’s sent, it’s gone for good,”
—Christopher Mufarrige, director of the FTC consumer protection bureau
Fraudulent activities such as impersonating government agencies or family members are rampant; consumers lost over $8.8 billion to scams in 2023 (FTC Report).
The FTC’s Case
In its June 2022 complaint, the FTC asserted that Walmart was aware of fraudsters exploiting its money transfer services. The retailer acts as an intermediary for money transfer companies like MoneyGram and Western Union. This can make tracing funds challenging once a transaction is complete.
The FTC highlighted numerous schemes. These involved impersonating IRS agents, claiming family emergencies, and informing victims of lottery wins that required upfront fees. While part of the case was dismissed, the settlement will now end the appeal, according to reports.
