Walmart will pay $10 million and take remedial action to settle Federal Trade Commission allegations involving wire transfer scams that took place at its stores, according to an agreement approved by a federal district court in Illinois, closing the door on a case the FTC brought in 2022.
Walmart didn’t immediately return a request for comment beyond a statement issued Friday ahead of the court’s ruling, outlining the agreement with the FTC and noting that it resolves the complaint. The retail giant “neither admits nor denies any of the allegations in the Complaint,” per court documents.
“Electronic money transfers are one of the most common ways that scammers tell consumers to send them money, because once it’s sent, it’s gone for good,” Christopher Mufarrige, who leads the FTC’s Bureau of Consumer Protection, said in a statement. “Companies that provide these services must train their employees to comply with the law and work to protect consumers.”
The FTC sued Walmart three years ago, alleging that “Walmart has not prevented consumers, including its own employees, from sending or receiving highly suspicious money transfers that it knew or had reason to believe were related to consumer frauds. In other cases, Walmart has continued to process fraud-induced money transfers while turning a blind eye to suspicious characteristics or other indicators that the transfers were induced by fraud.”
Through its wire transfer services, provided via partnerships with MoneyGram, Western Union and Ria, Walmart “frequently processed transactions that had suspicious characteristics.” That included high-dollar amounts, “data integrity” problems with identifications or addresses and various other red flags, according to the original complaint. The agency added more details a year later.
Employees working on Walmart wire-transfer service desks were under-trained, ill-equipped and in some cases complicit, the FTC alleged. The types of activity getting by them included “telemarketing and other mass marketing frauds, such as ‘grandparent’ scams, lottery scams, and government agent impersonator scams.”
“These practices have harmed many consumers, including people struggling with debt, those threatened by imposters, and older Americans,” FTC lawyers said in their complaint.
In addition to the financial settlement, Walmart has agreed not to provide money transfers “without taking timely and appropriate action to effectively detect and prevent” fraudulent activity.
