Federal Trade Commission sues Walmart for facilitating fraudulent money transfers

Customers were scammed out of hundreds of millions of dollars

LINCOLN, Neb. (KLKN) – The Federal Trade Commission announced Tuesday that they have filed a lawsuit against Walmart for allowing money transfer services to be used by online scammers.

Scammers used Walmart’s services to steal hundreds of millions of dollars from customers, according to the lawsuit.

The FTC alleges that the company turned a blind eye for years, while scammers took advantage of Walmart’s failure to properly secure its money transfer services.

It also alleges that Walmart did not properly train its employees, failed to warn customers, and used procedures that allowed fraudsters to cash out at its stores.

The commission claims that the company’s money transfer services harmed consumers in numerous ways, including:

• Allowing the payout of suspicious transfers
• Having no anti-fraud policy or an ineffective, poorly enforced policy
• Allowing cash pickups for large payments
• Not providing materials to prevent consumers from sending fraudulent payments
• Failing to effectively train or retrain staff
• Allowing money transfers to be used for telemarketing purchases

The commission is asking the court to order Walmart to return money to consumers.  They’re also saying that the court should impose penalties against the company for its violations.

“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.

According to the complaint, the FTC’s investigation of Walmart’s practices showed that company leaders knew about the role money transfer services play in scams and frauds.

Visit the FTC’S website for more information on the lawsuit.