Walmart Pays $10 Million in Money Transfer Fraud Case
FTC alleged widespread facilitation of fraud
Walmart profits from looking the other way when scammers use their financial products to facilitate fraud.
Now, the retail giant is paying the price - or, well, a price. Not a very big one, tbh.
The FTC reports that Walmart will pay $10 million to settle claims it allowed scammers and fraudsters to use its products and did little to stop them.
The FTC’s June 2022 complaint alleged that between 2013 and 2018, Walmart (including in its capacity 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 implement effective anti-fraud policies and procedures, did not properly train its employees, and failed to warn customers about potential fraud related to money transfers, according to the complaint.
While customers lost hundreds of millions of dollars, Walmart will only pay $10 million.
In a previous story on how Walmart profits from fraud, ProPublica noted:
Too often, Walmart has failed. More than $1 billion in fraud losses were routed through the company’s financial systems between 2013 and 2022, according to filings by the Federal Trade Commission and court cases analyzed by ProPublica.
Walmart has a financial incentive to avoid cracking down. It makes money each time a Walmart gift card is used and earns a fee when another brand of card is bought. And it receives one commission when a person sends a money transfer and a second when the recipient picks it up. The company’s financial services business generates hundreds of millions in annual profits. (Its filings do not provide specific figures for gift cards and money transfers.)
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AdvocateAndy highlights a form of fraud that big corporations use to take money from consumers every day! Making things worse is that the administration is gutting the FTC and other agencies that protect us! You'll miss the government when it's gone! Fight for the government!