The Federal Trade Commission (FTC) has filed an amended complaint in the U.S. District Court for the Northern District of Illinois, strengthening its case against Walmart.
The amended complaint provides additional details on Walmart's alleged violations of the Telemarketing Sales Rule, particularly the rule that prohibits the use of cash-to-cash money transfers in telemarketing transactions.
According to the complaint, Walmart neglected to address the misuse of its money transfer services by scammers, failing to adequately train employees and warn customers about potential risks. The company's procedures also facilitated scammers in cashing out at Walmart stores.
Money transfers are a favored tool for fraudsters in various scams due to the difficulty in recovering funds once they have been collected. The amended complaint highlights multiple instances where scammers relied on Walmart's money transfers for fraudulent activities, including telemarketing schemes such as sweepstakes scams, advance-fee loan scams, IRS impersonation schemes, and grandparent scams.
The FTC's investigation revealed that Walmart was aware of the role money transfer services play in fraud and telemarketing schemes. Despite this knowledge, the company's money transfer practices harmed consumers in several ways, including allowing transfers with fraud-like characteristics, lacking an effective anti-fraud policy, permitting cash pickups for substantial payments, failing to provide warnings to prevent scam-related payments, inadequately training staff, and enabling money transfers for telemarketing purchases that violate the Telemarketing Sales Rule.
The amended complaint was approved by a 3-0 vote by the Commission to authorize staff to file it in court. The FTC's mission is to protect consumers, promote competition, and provide consumer education. To learn more about consumer topics, visit consumer.ftc.gov, report fraud and scams at ReportFraud.ftc.gov, and stay updated with the latest news and alerts by following the FTC on social media and reading their consumer alerts and business blog.
source: FTC
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