Walmart advertises itself as a one-stop store that provides vehicle care, health services, and other types of assistance in addition to being a location to buy food.
The large retailer provides financial services, according to the Federal Trade Commission (FTC), which contends that these services are not adequately regulated.
The FTC filed a lawsuit against Walmart this week for “enabling fraudsters to utilise its money transfer services to defraud consumers out of hundreds of millions of dollars.”
Director of the Bureau of Consumer Protection for the government organisation, Samuel Levine, stated it this way: “Walmart ignored the issue and earned millions in fees while scammers utilised its money transfer services to steal funds. Consumers have lost hundreds of millions, and Walmart is being held accountable by the Commission.”
According to Forbes, Walmart started providing financial services in 2009 by enabling bill payment through the stores’ Money Centers.
The range of financial products offered by Walmart soon included prepaid cards, debit cards, and loans for small businesses made available through Sam’s Club.
According to CNN, the business now helps customers apply for credit cards, make cash deposits and withdrawals, and use money transfer services on behalf of MoneyGram and Western Union.
According to the FTC, fraudulent transactions involved about $200 million.
However, during that time, Walmart either lacked anti-fraud policies or, when they were finally implemented, their employees were either undertrained to spot fraud or actively participated in it by accepting cash tips to facilitate the fraud, according to The New York Times, which reports on the FTC’s lawsuit.
The group claims that Walmart didn’t have a consumer protection programme until 2014 and that it started educating employees (at some locations) in 2017 to recognise bogus rewards.
Sweepstakes fraud, relative-in-need “grandparent” scams, and IRS impersonation fraud are some of the schemes the FTC discovered as occurring at Walmart. Scams involving Walmart gift cards have also been warned off by customers.
The FTC estimates that fraudulent transactions cost around $200 million.
The New York Times, which reports on the FTC’s action, claims that during that time Walmart either lacked anti-fraud rules or when they were ultimately enacted, their staff were either undertrained to recognise fraud or actively participated in it by collecting cash tips to enable the fraud.
The group asserts that Walmart didn’t implement a consumer protection policy until 2014 and that it began training personnel to spot fake awards in 2017 (at select locations).
Some of the frauds the FTC found to be taking place at Walmart include IRS impersonation fraud, relative-in-need “grandparent” scams, and sweepstakes fraud. Customers have also been cautioned about scams involving gift cards from Walmart.
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The FTC estimates that at least $197 million in total has been connected to fraud accusations filed between 2013 and 2018. A further $1.3 billion may “maybe” be fake.
Responding to the FTC’s action, Walmart argued that it was “factually defective and legally baseless,” adding that it will “defend the company’s comprehensive anti-fraud procedures that have helped protect countless consumers.” Walmart is being urged by the FTC to pay fines and reimburse duped customers for their money.
