In a high-stakes resolution echoing the adage “where there’s smoke, there’s fire,” retail behemoth Walmart has agreed to shell out $10 million to settle a Federal Trade Commission lawsuit alleging the company “turned a blind eye to scammers” who exploited its money transfer services to siphon millions from consumers.
The FTC and Walmart jointly requested that an Illinois federal judge sign off on a stipulated order for injunction and monetary judgment, locking Walmart into a future of tighter oversight in its role as a money transfer service provider.
Walmart Banned From Ignoring Red Flags
As part of the proposed deal, Walmart will face strict constraints. The company will no longer be permitted to process money transfers it knows—or willfully avoids knowing—are fraudulent, per the FTC. In addition, the settlement bars Walmart from aiding any telemarketer or seller who accepts cash-to-cash money transfers in exchange for products, services, or donations requested via telemarketing. The same applies to any operation that solicits upfront payments for loans or credit extensions.
FTC Bureau of Consumer Protection Director Christopher Mufarrige minced no words in Friday’s announcement, warning that money transfers are often the “scammers’ payment method of choice,” given the irreversibility of such transactions.
