business news in context, analysis with attitude

Reuters reports that the Federal Trade Commission (FTC) has filed a lawsuit against Walmart, charging that the retailer has "allowed scam artists to use its money transfer services for fraud that cost consumers 'hundreds of millions of dollars' … For years, the FTC said, Walmart policy was to issue payouts even when fraud was suspected and that the retailer failed to take other actions to prevent consumers from being defrauded."

The Reuters story says that the FTC is charging that "Walmart failed to properly train staff to help them prevent consumers from sending money to scammers," and is asking the courts "to order Walmart to return lost funds to consumers and to pay civil penalties."

Walmart is being sued in its capacity as an agent for money transfer services such as MoneyGram and Western Union.

The Axios story says that "the complaint claims investigations found that fraudsters relied on Walmart money transfers to receive payments from telemarketing schemes, relative-in-need 'grandparent' scams and sweepstakes stings."

And, Axios reports, Walmart has responded to the filing with the following statement:  "A narrowly divided Federal Trade Commission brought this factually flawed and legally baseless civil lawsuit after the Chair refused Walmart the due process of hearing directly from the company, and even the Justice Department refused to take this case to court."

KC's View:

I'll be interested to see how this plays out, if only for educational purposes.  If I am scammed by someone, and I go to Walmart to send the scammer money via MoneyGram and Western Union, I'm not entirely sure how Walmart would know it, prevent it, or be culpable.

I'm not saying that Walmart is blame-free.  I'm just saying that I don't really understand the mechanics of it, and am willing to be enlightened - by both sides.