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FTC sues Walmart, alleging money transfers fleeced customers of $197 million

A Walmart is shown in Modesto, Calif. The FTC sued Walmart Tuesday, alleging its money transfer allowed customers to be fleeced of more than $197 million from 2013-2018. File Photo by Taurus Emerald/<a href="https://commons.wikimedia.org/wiki/File:Walmart_Modesto,_California.jpg" target="_blank">Wikimedia Commons</a>
A Walmart is shown in Modesto, Calif. The FTC sued Walmart Tuesday, alleging its money transfer allowed customers to be fleeced of more than $197 million from 2013-2018. File Photo by Taurus Emerald/Wikimedia Commons

June 29 (UPI) -- The Federal Trade Commission sued Walmart, alleging that the retailer turned a blind eye to scammers using its money transfer services to defraud Walmart customers of more than $197 million.

The FTC said in a statement Tuesday that it 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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"While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees," FTC Bureau of Consumer Protection Director Samuel Levine said in the statement.

In a statement on its website, Walmart called the lawsuit unfounded.

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"The FTC's complaint distorts the facts and the law to try and hold Walmart responsible for a miniscule amount of reported fraud, even though we had an extensive program to try to stop such fraud, and continuously improve our anti-fraud efforts to this day," Walmart's statement said.

For years, according to the FTC, Walmart allowed the payout of suspicious money transfers, making it easy for scammers to retrieve fraud proceeds at Walmart locations.

A Walmart reference guide referenced by the FTC said, "If you suspect fraud, complete the transaction."

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The FTC said Walmart also allowed cash pickups for large payments.

"Walmart has worked hard to stop fraud and our associates have stopped hundreds of millions of dollars in suspicious transactions," a statement on Walmart's website said.

The lawsuit was filed Tuesday in the United States District Court for the Northern District of Illinois.

The suit said based on information from MoneyGram, Ria's and Western Union databases there were at least 226,679 complaints between 2013 and the end of 2018 involving Walmart money transfers.

"These complaints represent only a small percentage of the actual fraud perpetrated through money transfers sent from or received at Walmart locations," the FTC said in the lawsuit.

"In many cases, older consumers (ages 65 and older) have been financially exploited by sending money transfers in connection with common telemarketing scams, such as grandparent scams, Good Samaritan scams, lottery or prize scams, and romance scams, from Walmart locations," the FTC alleged in the suit.

The suit alleges among other things that Walmart has failed to establish and maintain an effective anti-fraud program, failed to properly train employees and failed to stop money transfers that Walmart or its employees know or suspect are fraud-induced.

The FTC suit seeks a permanent injunction barring future Walmart violations of the FTC Act, the awarding of monetary civil penalties for each violation of that law, monetary relief and other relief including refunds of money, return of property and payment of damages.

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The suit also seeks "any additional relief as the Court determines to be just and proper."

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