In a settlement reflecting the scale of negligence in retail financial services, Walmart agreed to pay $10 million to settle over allegations that it facilitated wire fraud through its money transfer services.
The Federal Trade Commission (FTC) accused the retail giant of not doing enough to stop wire transfer scammers, despite the company maintaining it did nothing wrong.
This week, the agency announced Walmart would pay $10 million to settle allegations that it facilitated wire fraud through its money transfer services.
The FTC claimed the retailer ignored scams that resulted in hundreds of millions of dollars being stolen from consumers between 2013 and 2018 through services offered in partnership with MoneyGram, Western Union, and Ria.
The government’s complaint, originally filed in June 2022, accused Walmart of failing to implement effective anti-fraud policies, properly train employees, or adequately warn customers about potential fraud risks.
Yet, the giant retailer has adamantly denied any wrongdoing, characterizing the case as an example of regulatory overreach.
Despite settling the case, Walmart stood its ground against the bureaucratic assault.
The company pushed back hard enough that the district court twice dismissed the FTC’s Telemarketing Sales Rule claim, significantly damaging the agency’s original case.
The Seventh Circuit Court of Appeals even allowed Walmart to appeal certain district court rulings, showing the retailer was not going down without a fight.
“Electronic money transfers are one of the most common ways that scammers tell consumers to send them money, because once it’s sent, it’s gone for good,” Director of the FTC’s Bureau of Consumer Protection, Christopher Mufarrige, said.
The settlement, approved by a 3-0 FTC vote, forces the company to implement additional measures to detect and prevent fraudulent transactions.
Walmart is now prohibited from providing money transfer services without implementing these government-mandated anti-fraud measures.
The deal also blocks Walmart from processing suspicious transfers or assisting telemarketers involved in fraud-induced money transfers.
This case represents a troubling pattern of government agencies targeting successful American businesses with excessive regulations and financial penalties.
Instead of focusing on the actual criminals perpetrating these scams, the FTC chose to go after a legitimate company providing valuable services to everyday Americans.
While dealing with this regulatory harassment, Walmart continues innovating to serve American consumers better.
The company is enhancing its shopping experience to compete with Amazon by integrating content consumption with shopping intent.
Following its acquisition of Vizio, Walmart is testing shoppable ads on smart TVs to transform passive viewers into active shoppers.
The stipulated final order awaits approval by a District Court judge in the Northern District of Illinois.
Once approved, it will have the force of law, giving the federal government yet another victory in its ongoing campaign to regulate and control American business through expensive settlements and burdensome mandates.
