Walmart allowed hundreds of millions in money transfer scams, feds allege

Retail giant Walmart will settle a federal lawsuit alleging it allowed scammers to use money transfer services to defraud consumers out of hundreds of millions of dollars over several years. Walmart will pay $10 million and the company promises to abide by several orders aimed at protecting consumers, the Federal Trade Commission said.

The FTC sued Walmart in 2022, alleging that from Jan. 1, 2013 through Dec. 31, 2018, Walmart didn’t properly train employees, didn’t warn customers about potential fraud and didn’t have “effective measures to detect and prevent fraud.” Victims included people crushed by debt, senior citizens and those vulnerable to scams initiated by imposters who claimed the consumer won a prize, owed back taxes, had a grandchild in jail or had their bank account hacked.

The average individual loss from the complaints involving Walmart was about $870. 

“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,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Companies that provide these services must train their employees to comply with the law and work to protect consumers.”

Walmart earned millions of dollars in fees to facilitate the money transfers, the lawsuit said.

The complaint said that, during the 2013 to 2018 period, consumers could send and receive money at thousands of Walmart stores in the United States and in other countries through the company’s money transfer services including MoneyGram International, RIA Financial Services and The Western Union Co. 

Complaints involving Walmart from 2013 to 2018 included:

• At least 176,672 complaints to MoneyGram, with losses of $159.6 million.
• At least 43,603 complaints to Ria, with losses of $32.7 million.
• At least 6,404 complaints to Western Union, with losses of $4.98 million in Canada, including 1,889 complaints with losses of $1.2 million involving transfers that originated from or were paid out in the United States.

“These complaints represent only a small percentage of the actual fraud perpetrated through money transfers sent from or received at Walmart locations,” the lawsuit said. “Walmart is responsible for a significant proportion of the complained-about fraud-induced money transfers flowing through its providers’ money transfer systems. 

“In fact, historically, Walmart has been responsible for more complaints about fraud-induced money transfers than any other agent worldwide,” the suit said.

PIRG urges consumers to never send money or share personal information with anyone they weren’t expecting to hear from, no matter who they say they are or what the Caller ID on the phone shows. PIRG also encourages people to talk with friends and relatives about the growing danger of scams, and the need to reach out to about unexpected requests.

See helpful tips in our consumer guide:
How to stop robocalls and robotexts and avoid scams