The Federal Trade Commission has filed a lawsuit against Walmart regarding money transfer services, claiming that Walmart has allowed fraud for years. The retailer says the lawsuit is misguided.
“Walmart has known for many years that scammers use its locations to get money for a grandparent, romance, and other scams, but it didn’t properly warn people or train its employees to prevent fraud,” the FTC said.
Walmart locations allegedly didn’t display information about potential fraud, which could have stopped victims from sending money to scammers. The FTC accused Walmart of not consistently posting warning signs, putting out fraud awareness brochures, or using the required money transfer “send” forms with front-page fraud warnings.
The FTC said that Walmart looked the other way when scammers picked up money at stores.
“For many years, the company didn’t confirm that employees who handle money transfers had the correct — or current — training before they started processing transactions. Walmart employees processed tens of millions of dollars in fraud-related wire transfers annually for many years.”
Walmart called the civil lawsuit factually misguided and legally flawed.
“Walmart will defend against this lawsuit aggressively. Pro-consumer competition in the money transfer industry is too important to be threatened by the unfortunate decisions of a few Commissioners of the FTC, and Walmart remains focused on fighting fraud and delivering low prices to our customers,” Walmart said.
The retailer claimed it helped its customers save an estimated $6 billion in fees since it began offering customers flat, low-fee money transfer services at its stores.
“Walmart serves as an “agent” of other companies that actually transmit the money from one location to the other. Walmart first began offering money transfers as a MoneyGram agent in 2005 and later became an agent for Western Union,” it said in a detailed statement released Tuesday.
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