Walmart wins dismissal of FTC lawsuit claim over money transfer fraud.

From Investing.com: 2024-07-05 16:00:47

A U.S. judge dismissed a claim in a Federal Trade Commission lawsuit against Walmart, accusing the retailer of ignoring scam artists using money transfer services to defraud consumers of hundreds of millions. The judge ruled that the FTC didn’t provide enough specifics on how Walmart and employees ignored warning signs of fraudsters breaking the law.

The FTC lawsuit claimed Walmart violated the federal Telemarketing Sales Rule, which prohibits deceptive acts and money transfers for telemarketing goods/services. U.S. District Judge Manish Shah in Chicago dismissed the claim, saying the FTC didn’t prove Walmart knowingly allowed scammers to use its money transfer services to deceive consumers.

The judge’s dismissal of the Telemarketing Sales Rule claim is a blow to the FTC, as the lawsuit alleged Walmart failed to stop fraudulent money transfers. Walmart welcomed the decision, criticizing the FTC’s case as an overreach. The retailer remains committed to protecting consumers from scam artists using its money transfer services.

Fraudsters exploited various schemes through Walmart’s money transfer services, including posing as IRS agents, relatives in need of money, or lottery winners seeking fees. The FTC lawsuit against Walmart highlights the challenges in regulating money transfer services and preventing financial scams targeting vulnerable consumers.

The FTC can still pursue an injunction against Walmart for alleged violations of unfair competition methods under the FTC Act, despite the dismissal of the Telemarketing Sales Rule claim. Walmart’s role as a money transfer agent for companies like MoneyGram and Western Union poses challenges in tracking and stopping fraudulent transactions.



Read more at Investing.com: Walmart beats key claim in US FTC lawsuit over money transfer fraud By Reuters