FTC accuses fraudsters of using Walmart’s money transfer service to defraud consumers, while Walmart turned a blind eye

Millions of Americans look to Walmart as the go-to place for essential items. Among those who rely on Walmart for their daily needs are scammers who allegedly used the retail giant’s money transfer service to defraud consumers out of millions of dollars, according to a complaint filed with the Federal Trade Commission.FTC lawsuit accuses Walmart of looking the other way in the face of massive fraud and illegal telemarketing deals Violate the law.

Whether it’s an IRS impersonation scam, sweepstakes fraud, or one of those “Help, Grandma” scams. I’m under arrest! “Extortion and money transfer are the lifeblood of scammers—and they rely on a seamless way to convert scammers into cold hard cash. That’s where Walmart’s money transfer service comes in, according to the FTC.

In addition to its retail business, Walmart also has a thriving business as a financial services provider. Walmart represents a variety of money transfer services, including MoneyGram, Ria and Western Union, and provides services under its Walmart2Walmart and Walmart2World brands.

There’s a good reason why sending money is a favorite payment method for scammers. Once a transfer is accepted, the transaction is nearly impossible to reverse. Perpetrators often go unpunished, leaving consumers in the lurch. The U.S. Federal Trade Commission has been sounding the alarm about the role money transfer players play in the fake ecosystem, leading to enforcement actions against MoneyGram and Western Union for failing to protect consumers who use their services.

You’ll need to read the complaint to learn the details of the FTC’s accusations against Walmart, but the bottom line is this. Walmart turned a blind eye to massive fraud in its money transfer business, according to the Federal Trade Commission. What are the benefits of Walmart? First, financial services drive retail sales, but Walmart also earns millions of dollars in fees from fraudulent transactions in its financial services.

The FTC said that for years, Walmart had a policy of making payments even in suspicious money transfers. The upshot: The crooks had to go to a nearby Walmart to collect the proceeds of their crimes. What’s more, the complaint alleges that Walmart failed to create a policy to detect fraudulent transfers, and that when the company finally enacted a policy, it failed to follow its own procedures, making it easier for scammers. Other alleged illegal conduct cited by the FTC in the complaint include Walmart’s failure to effectively train its employees and Walmart’s failure to adequately warn its money transfer customers of the risk of fraud.

The FTC also alleged that despite a clear provision in the Telemarketing Sales Rule prohibiting the use of money transfers to pay for telemarketing purchases, Walmart failed to take necessary steps to comply with that prohibition.

The lawsuit, filed in federal court, seeks, among other things, refunds for defrauded consumers, civil penalties and sweeping changes to how Walmart operates its money transfer business. Even at this early stage, our message to other companies is that turning a blind eye to fraud is bad behavior.

Do you know someone who has lost money to a transfer scam? The Federal Trade Commission has resources to help them spot signs of scams.