Walmart has agreed to pay $10 million to settle a US Federal Trade Commission (FTC) lawsuit that accused the retailer of failing to act on red flags that fraudsters were using its money transfer services to defraud consumers of hundreds of millions of dollars.
Filed Friday in a Chicago federal court, the settlement, still pending approval by US District Judge Manish Shah, also prohibits Walmart from processing money transfers it suspects are fraudulent or from assisting telemarketers and sellers believed to be engaged in scams.
“Companies that provide these services must train their employees to comply with the law and work to protect consumers,” said Christopher Mufarrige, director of the FTC’s consumer protection bureau.
Walmart, which did not admit wrongdoing, said in a statement that it was pleased to resolve the case and shared the FTC’s goal of protecting consumers from scams, including fraud-induced money transfers.
The FTC originally sued in June 2022, alleging that Walmart “turned a blind eye” as fraudsters used its stores to collect funds transferred via MoneyGram, Ria, and Western Union.
The scams often involved impersonators claiming to be IRS agents, lottery officials, or family members in urgent need of money.
Although part of the case was dismissed in July 2023, Judge Shah allowed the FTC to proceed with key claims—prompting Walmart to appeal. The settlement will also bring that appeal to a close.
The case is Federal Trade Commission v. Walmart Inc., No. 22-03372, U.S. District Court, Northern District of Illinois.
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