The Federal Trade Commission has filed a lawsuit against Walmart on allegations that the retailer allowed scammers to defraud customers out of millions of dollars in wire transfers. The retailer quickly denounced the FTC action as baseless in a corporate statement.
According to the agency, Walmart has “long been aware” of scams relying on wire transfers, such as those involving persons claiming to be in need, government agent impersonators, and fake lotteries and prizes.
The FTC alleged that Walmart failed to adequately train employees and monitor and address suspicious money transfer activities. It also pointed to policies such as paying transfers in cash and lack of ID requirements that have allowed fraudsters to quickly collect scammed payments at multiple locations.
The agency cited compliance reviews from wire transfer partners MoneyGram and Ria Financial Services that found inadequate employee knowledge, missing fraud awareness materials and other issues.
Walmart has offered wire transfers for years, with partners including Western Union, MoneyGram and Ria. The government lawsuit comes as Walmart has been building out its financial services to make itself ever more of a one-stop shop for financial and other services, something the FTC alluded to as well.
In its statement, Walmart called the lawsuit, “factually flawed,” “legally baseless” and an “unprecedented expansion of the FTC’s authority.” The company said that the FTC chair “refused Walmart the due process of hearing directly from the company” and that the Justice Department had declined to take the case to court.
Walmart also said it has driven down prices on transfers and estimated it saved consumers $6 billion in transfer fees.
