The Federal Trade Commission (FTC) is suing Walmart, alleging that the retail giant "turned a blind eye" while fraudsters used its money transfer service to fleece consumers of hundreds of millions of dollars.
In its suit, the FTC says that for years Walmart's stated policy was for its employees to issue payouts even in the case of a suspicious money transfer.
Citing industry databases, the regulator says that from 2013 to 2018 more than $197 million in payments that were the subject of fraud complaints were sent or received at Walmart. Another $1.3 billion in related payments were also possibly connected to the fraud.
Scammers relied on Walmart money transfers as a primary way to receive payments for scams like telemarketing schemes, relative-in-need “grandparent” scams, and sweepstakes scams, says the suit.
The FTC is asking the court to order Walmart to return money to consumers and to impose civil penalties.
“While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” says Samuel Levine, director, FTC bureau of consumer protection.