Greg's Corner

Walmart Fined $10M Over Scam Transfers

By Greg Collier

When scammers aren’t asking for gift cards or precious metals, they’re often relying on money transfers. These services offer a fast, irreversible way to move cash, making them an attractive tool for fraud. One of the most accessible and widely used venues for money transfers in the United States is Walmart. Now, the retail giant has agreed to pay $10 million to settle charges brought by the Federal Trade Commission (FTC) over its handling of scam-related transfers.

The FTC alleged that for years Walmart allowed its in-store money transfer services to be exploited by criminals. According to the agency, from 2013 to 2018, the company failed to enforce adequate anti-fraud policies and procedures. It also did not properly train staff or effectively warn customers about the risks associated with certain types of money transfers. These failures reportedly allowed scammers to take hundreds of millions of dollars from consumers, often in the context of impersonation schemes, bogus telemarketing offers, and fraudulent payments for nonexistent services or goods.

Walmart acted as an agent for major transfer networks, including MoneyGram and Western Union, during the period in question. The FTC’s case pointed to a pattern of neglect that enabled widespread abuse. Though an amended complaint filed in 2023 expanded on these allegations, the Commission faced setbacks in court. A key telemarketing claim was dismissed twice, limiting the agency’s ability to seek broader consumer restitution. However, the resolution announced this month marks a partial victory, setting enforceable standards for future conduct.

The final order, filed in the U.S. District Court for the Northern District of Illinois, is designed to prevent similar problems going forward. Walmart is now prohibited from continuing money transfer operations without taking meaningful steps to detect and stop fraud. The company is also barred from facilitating or supporting telemarketers who use these transfers to extract upfront payments or who solicit money under deceptive pretenses.

The $10 million settlement is relatively small compared to the scale of the alleged fraud, but it underscores the importance of corporate responsibility in the financial services sector. Consumers continue to be targeted through a range of schemes that depend on fast and irreversible payments. When retailers provide these services, they also carry the obligation to help safeguard the public.

This case highlights how a lack of oversight at the point of service can lead to substantial harm. Whether through wire transfers, gift cards, or digital platforms, scammers thrive on speed and anonymity. Regulatory action like this serves as a reminder that vigilance and consumer protection must be a priority wherever money changes hands.