On Tuesday, June 24th, a agreement was announced that American multinational retailer Walmart has agreed to pay $10 million to settle charges by the Federal Trade Commission (FTC) that Walmart allowed scammers to use its in-store money transfer services to defraud consumers of hundreds of millions of dollars across the United States.
The FTC conducted a years-long investigation into this case, originally filing a lawsuit against Walmart in June 2022.
The complaint alleges that between 2013 and 2018, Walmart (including as an agent for MoneyGram, Western Union, and Ria) allowed fraudsters to exploit its money transfer services to deceive consumers, resulting in losses of hundreds of millions of dollars.
The Commission reached a final decision with a 3-0 vote, requiring Walmart to comply with a series of new terms to prevent similar fraudulent activities in the future.
These terms prohibit the company from:
The proposed decision has been submitted to the Eastern District Court of the Northern District of Illinois by the Commission.
Christopher Mufarrige, Director of the Bureau of Consumer Protection under the FTC, stated that “electronic money transfers are one of the most common ways scammers ask consumers for money because once the money is sent, it’s gone.”
He also emphasized that “companies offering such services must train their staff to comply with the law and make efforts to protect consumers.”
According to the complaint, Walmart failed to implement effective anti-fraud policies and procedures, did not provide proper training to employees, and did not alert customers to potential fraud risks associated with money transfers.
The FTC is an independent federal regulatory agency, not a traditional court. While it can refer certain cases to federal courts, its primary enforcement mechanism is through administrative procedures, where it acts as both prosecutor and judge.