FTC Says Walmart Facilitated Scams That Stole Hundreds of Millions





Today the FTC announced that it has filed an amended complaint against Walmart in the  U.S. District Court for the Northern District of Illinois. The FTC says Walmart failed to properly protect its wire transfer service that, allowed scammers to use it to steal hundreds of millions of dollars.

Scammers often use money transfers in scams because the money is difficult to recover once it has been picked up. The amended complaint cites several examples of this, including scammers who used Walmart money transfers to receive payments for sweepstakes scams, advance-fee loan scams, IRS impersonation scams, and grandparent scams.

The FTC’s investigation of Walmart’s money transfer practices showed, according to the complaint, that Walmart knew about the role money transfer services play in fraud and telemarketing schemes. The FTC goes on to say Walmart did not do enough to stop these scams.

Here is how the FTC says Walmart failed when it came to its money transfer systems.

  • Allowing the payout of transfers with characteristics of fraud;
  • Having no anti-fraud policy or an ineffective, poorly enforced policy; 
  • Allowing cash pickups for large payments;
  • Not providing warnings to prevent consumers from sending payments related to scams;
  • Failing to effectively train or retrain staff;
  • Allowing money transfers to be used for telemarketing purchases that violate the Telemarketing Sales Rule.

The Commission vote to authorize staff to file the amended complaint in the U.S. District Court for the Northern District of Illinois was 3-0.

“According to the amended complaint, Walmart for years turned a blind eye while scammers took advantage of its failure to properly secure the money transfer services offered at Walmart stores. Walmart did not properly train its employees, failed to warn customers, and used procedures that allowed scammers to cash out at its stores, according to the FTC’s complaint.” The FTC said in its statement today.

Now we wait to see how the court will rule on this FTC complaint. It is possible Walmart will be forced to make changes or pay a fine depending on how the court rules.

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