The Federal Trade Commission is suing Walmart for watching scammers loot more than $197 million in customers, the agency said in a statement. It is seeking a court order that would force Walmart to return money to customers, on top of civil fines.
In a brief response, Walmart described the lawsuit as both “factually flawed and legally unfounded.”
Money transfer scams are rife and can be anything from promises to share an inheritance to lies about a family emergency. They happen just about everywhere from Zelle, Venmo and Cash App to cryptocurrency ATMs and popular dating apps.
In this case, the FTC claims that Walmart “turned a blind eye to fraud” that was taking place in its stores. The retail giant offers money transfer services under its own brand names, such as Walmart2Walmart. Between 2013 and 2018, the FTC alleges that Walmart failed to protect its customers in several ways, including by failing to train its staff and by using “procedures that allow fraudsters to cash out in its stores,” the agency said.
The lawsuit follows previous allegations of FTC fraud against two of Walmart’s money transfer partners, MoneyGram and Western Union; both reached $100 million settlements with the agency in recent years.