CHICAGO — Walmart has agreed to a $10 million settlement to resolve a civil lawsuit filed by the U.S. Federal Trade Commission, which alleges that the retailer failed to take necessary actions against fraudsters exploiting its money transfer services. The lawsuit claims that this negligence allowed criminals to defraud consumers of hundreds of millions of dollars.
The settlement was submitted in federal court in Chicago and is pending approval by U.S. District Judge Manish Shah. As part of the agreement, Walmart committed to enhancing its protocols around money transfers, specifically pledging to not process transfers that it suspects may be linked to fraudulent activities. The company also plans to assist in preventing the use of its services for fraudulent purposes by unscrupulous sellers and telemarketers.
Christopher Mufarrige, director of the FTC’s consumer protection bureau, emphasized the importance of safeguarding consumers against such scams, which often use money transfers as a primary means of operation. “Electronic money transfers are one of the most common ways that scammers tell consumers to send them money, because once it’s sent, it’s gone for good,” he said. Mufarrige underscored that service providers like Walmart have a responsibility to train their employees properly to prevent fraud.
Walmart, based in Arkansas, neither acknowledged nor denied any wrongdoing in its decision to settle. The company has not issued an immediate response to inquiries regarding the settlement.
The FTC’s complaint, initiated in June 2022, accused Walmart of being negligent in its oversight of fraud that exploited its money transfer services. As an agent for well-known money transfer companies like MoneyGram and Western Union, Walmart’s services can be difficult to trace after funds are sent.
Fraud schemes have reportedly included impersonations of IRS agents, false claims of family emergencies, and deceptive lottery notifications demanding upfront fees to collect winnings. Such tactics highlight the diverse methods fraudsters employ to manipulate victims.
Last July, Judge Shah dismissed part of the FTC’s case but permitted the agency to pursue the remainder of its claims, which prompted Walmart to file an appeal. The settlement reached on Friday effectively concludes that appeal, allowing both parties to move forward.
This decision reflects growing scrutiny over corporate responsibilities in consumer protections, especially as technology continues to evolve in the financial sector.
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