Federal Trade Commission (FTC), Money Transfer, Regulation, Remittance, walmart -

FTC files amended money transfer scam complaint against Walmart

As reported by Payments Cards & Mobile back in June 2022, the Federal Trade Commission (FTC) sued Walmart for allowing its money transfer services to be used by fraudsters, who fleeced consumers out of hundreds of millions of dollars.

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FTC files amended money transfer complaint

Walmart pursued a dismissal, asking the federal court handling the FTC’s lawsuit into money transfer fraud to dismiss it. Walmart’s brief laid out several reasons why the FTC’s case was legally flawed and shouldn’t go forward.

Now, the FTC has filed an amended complaint bolstering the agency’s case that Walmart allowed its money transfer services to be used by scammers.

The FTC filed the amended complaint in the U.S. District Court for the Northern District of Illinois, following the court’s March 27, 2023 ruling on the FTC’s initial complaint.

The amended complaint adds further details on Walmart’s alleged violations of the Telemarketing Sales Rule, including the Rule’s ban on the use of cash-to-cash money transfers in any telemarketing transaction.

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.

Money transfers are frequently used by fraudsters across a wide variety of scams because they are nearly impossible to retrieve after the money has been picked up.

The amended complaint cites numerous instances in which scammers relied on Walmart money transfers as a primary way to receive payments, including in telemarketing schemes such as sweepstakes scams, advance-fee loan scams, IRS impersonation schemes, relative-in-need “grandparent” scams, and others.

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 frauds and telemarketing schemes.

Despite that, the company’s money transfer services harmed consumers in numerous ways, including:

  • 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 authorise staff to file the amended complaint in the U.S. District Court for the Northern District of Illinois was 3-0.


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