Walmart will pay $10 million to settle Federal Trade Commission charges that it turned a blind eye to scammers who used its in-store money transfer services to take hundreds of millions of dollars from U.S. consumers.
The settlement, which requires the approval of U.S. District Judge Manish Shah, was filed on Friday in Chicago federal court.
“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’s Bureau of Consumer Protection, said in a statement. “Companies that provide these services must train their employees to comply with the law and work to protect consumers.”
The FTC’s June 2022 lawsuit alleged that between 2013 and 2018, Walmart, as an agent of MoneyGram, Western Union, and Ria, allowed its money transfer services to be used by scammers who defrauded consumers out of hundreds of millions of dollars.
Walmart failed to carry out effective anti-fraud policies and procedures, didn’t properly train its employees, and failed to warn customers about potential fraud related to money transfers, according to the lawsuit.
In addition to the $10 million judgment, the order prohibits Walmart from providing money transfer services without taking action to prevent fraud-induced money transfers and sending a money transfer that it knows is a fraud-induced.
Last July, Shah dismissed part of the FTC case, but allowed the agency to continue its regulatory action on the rest. Friday's settlement would end the appeal Walmart filed from that decision.
Wow. Not much shocks me anymore but this really did
I’m glad the FTC is going after companies on this. When customers come in all stressed and are anxious about money transfers and gift cards, staff should warn them about the possibility of scams. People have lost thousands and thousands of dollars through scams using gift cards and money transfers as payment. Almost 80 million people in the U.S. have lost money to scams in the last five years.
Sigh. Not surprised. Greed is epidemic.
Yes. And with modern technology, it’s even more important that people follow the advice from an attorney general: An alert, informed consumer is the best protection against fraud.