Walmart to pay $10M to settle FTC charges related to wire transfer services

Walmart (WMT) will pay $10M to settle Federal Trade Commission charges that it turned a blind eye to scammers who used its in-store money transfer services to take hundreds of millions of dollars from U.S. consumers. The FTC’s June 2022 complaint alleged that between 2013 and 2018, Walmart allowed its money transfer services to be used by scammers who defrauded consumers out of hundreds of millions of dollars. Walmart failed to implement effective anti-fraud policies and procedures, did not properly train its employees, and failed to warn customers about potential fraud related to money transfers, according to the complaint. In June 2023, the FTC filed an amended complaint adding further details related to the company’s alleged telemarketing violations. In July 2024, the district court dismissed the Commission’s Telemarketing Sales Rule claim for the second time, presenting a significant hurdle for the Commission to obtain monetary relief for consumers in the litigation. In November 2024, the Seventh Circuit Court of Appeals granted Walmart permission to appeal certain rulings by the district court. The stipulated order announced resolves the FTC’s case against Walmart and is intended to ensure the company does not engage in similar alleged conduct in the future. In addition to imposing the $10M judgment, the order prohibits Walmart from: providing money transfer services without taking timely and appropriate action to effectively detect and prevent fraud-induced money transfers; sending or paying out any money transfer that it knows, or consciously avoids knowing, is a fraud-induced money transfer; substantially assisting or supporting any seller or telemarketer that it knows, or consciously avoids knowing, is accepting a cash-to-cash money transfer as payment for goods, services or charitable contributions sought through telemarketing and substantially assisting or supporting any telemarketer that it knows, or consciously avoids knowing, has asked a consumer to pay in advance for a loan or credit extension. The Commission vote approving the stipulated final order was 3-0.