FTC Sues Walmart For Facilitation of Fraud

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Over the years, you may have heard of someone getting scammed while using Walmart’s money transfer services. At a minimum, you might know someone who was at least approached to make what seemed like a shady money transfer. Maybe it’s even happened to you.

On Wednesday, the Federal Trade Commission sued Walmart for allowing its money transfer services to be used to commit fraud which led to consumers being cheated out of hundreds of millions of dollars.

The FTC isn’t alleging that Walmart directly defrauded its customers, but it does say that the giant company “turned a blind eye” to something it knew was happening.

In the lawsuit’s “Summary of Case,” the FTC alleges: “Money transfers are a common vehicle for fraud. Walmart offers money transfers through its stores, and for many years, consumers have reported tens of millions of dollars annually in fraud-induced money transfers processed by Walmart employees. These practices have harmed many consumers, including people struggling with debt, those threatened by imposters, and older Americans. Walmart is well aware that telemarketing and other mass marketing frauds, such as “grandparent” scams, lottery scams, and government agent impersonator scams, induce people to use Walmart’s money transfer services to send money to domestic and international fraud rings. Nevertheless, Walmart has continued processing fraud induced money transfers at its stores—funding telemarketing and other scams—without adopting policies and practices that effectively detect and prevent these transfers.”

The FTC’s lawsuit accused Walmart of failing to properly train its employee or to warn its customers of the potential fraud. It is asking the court to “order Walmart to return money to consumers and to impose civil penalties for Walmart’s violations.”

As part of its allegations, the FTC said that Walmart had received fraud reports of $197 million payments from 2013 to 2018, reports The Hill. They alleged that $1.3 billion in related payments were also suspicious.

Samuel Levine, the director of the Bureau of Consumer Protection, says Walmart made millions off of fees related to these fraudulent transfers. He said, “While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees.”

One person had this to say, tweeting: “Fraudulent woke lefty corporations? Say it isn’t so[.]”

Walmart has responded to the lawsuit, saying it’s “factually flawed and legally baseless.” In a statement, Walmart said: A narrowly divided Federal Trade Commission (“FTC”) 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 statement continued: “Claiming an unprecedented expansion of the FTC’s authority, the agency seeks to blame Walmart for fraud that the agency already attributed to another company while that company was under the federal government’s direct supervision.”

Finally, Walmart ended their statement by saying that “Walmart will defend the company’s robust anti-fraud efforts that have helped protect countless consumers, all while Walmart has driven down prices and saved consumers an estimated $6 billion in money transfer fees.”

Have you seen the baby wooly mammoth a gold miner just found near Alaska?

In some ways, everyone loves Walmart and hates them at the same time. Their prices can’t be beaten but they come at the expense of putting small local businesses out of business. If they knew about fraud but didn’t do anything, and pocketed millions, they should be punished. But they should get the opportunity to defend themselves. What do you think of the lawsuit?

Stacey Warner

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