The Way Walmart Allegedly Enabled Fraud At Its Stores
Walmart is in big trouble with the law. The Federal Trade Commission is alleging that the retail giant was a conduit to fraud.
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Walmart isn’t exactly the cream of the crop in terms of retail outlets. However, new information has surfaced that suggests something that is low even for the likes of Walmart. The Federal Trade Commission (FTC) has put Walmart in the legal hot seat. The agency is accusing the retail giant of knowingly being a conduit to fraud.
The FTC is honing in on information it had been examining from the years 2013 to 2017. According to The New York Times, the agency is asserting that between those years Walmart “turned a blind eye” while its customers were defrauded of $197 million worth of payments sent via Walmart’s money transfer service. “While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” recounted Samuel Levine, the director of the F.T.C.’s Bureau of Consumer Protection, per a statement obtained by The New York Times.
The Federal Trade Commission highlighted that there were serious flaws in Walmart’s money transfer service anti-fraud policy. The agency made specific mention of the fact that it was very easy for scammers to pick up the cash transfers by simply using a fake ID. Thus, making it even easier to successfully dupe unsuspecting fraud victims. Moreover, the FTC also highlighted that Walmart let these activities go on for years without any attempt to plug the holes in their fraud policies. The agency is arguing that Walmart let its patrons become victims of fraud so it could adequately grow its money transfer service and bolster its bottom line. The conclusions the FTC drew from its investigation into Walmart led the agency to file a lawsuit against the retail behemoth. The lawsuit was filed in the U.S. District Court in Chicago.
In response, Walmart has vehemently refuted the allegations brought upon them by the FTC. Walmart called the suit “baseless” and claimed that the FTC denied the company its due process. In a statement, the retail titan asserted that “Walmart will defend the company’s robust anti-fraud efforts that have helped protect countless consumers.” In an attempt to further falsify the FTC’s allegations, Walmart pointed to the FTC’s failure to effectively prosecute a third party involved in processing the money transfers.
At present, it is unknown how the FTC’s lawsuit against Walmart will ultimately play out. However, this isn’t the only contention that Walmart is currently grappling with. The retailer is also facing staffing challenges. They are finding particular difficulty in recruiting qualified store managers, despite offering a substantial six-figure annual wage.
The retailer is also contending with challenges associated with inflation, high gas prices, supply chain deficits, and immense overstock due to shifting consumer shopping patterns. In fact, overstock of some items has become so significant that the retail giant is reportedly giving heavy consideration to paying customers to keep their unwanted returns. All in all, it’s clear that Walmart has its hands full right now. Although, its reckoning is not yet as severe as ones being felt by Kohl’s, Bed Bath and Beyond, and other once-mighty retail royals.
