A Major Retailer’s Wire Transfer Policies Under Scrutiny

For years, Walmart faced allegations that it turned a blind eye to criminals who exploited its in-store money transfer services. According to the Federal Trade Commission (FTC), this misconduct led to the retailer agreeing to pay $10 million to settle the claims.

Basic Anti-Fraud Measures Ignored

The FTC investigation revealed that Walmart lacked essential anti-fraud safeguards, including inadequate employee training and insufficient customer alerts. The company was also criticized for instructing staff to process payouts even when fraud suspicion arose. This is highlighted by a reference guide used by employees, which directed: “If you suspect fraud, complete the transaction.”

Walmart’s Role in Facilitating Fraud

The FTC’s statement emphasized that Walmart continued to facilitate fraud-induced money transfers at its stores, supporting telemarketing and other scams. The organization did not implement effective measures to detect and prevent these incidents.

Tens of Millions of Transactions Annually

Between 2013 and 2018, Walmart’s in-store services facilitated nearly $200 million worth of payments that were the subject of fraud complaints. The retailer acts as an agent for various money transfer services, including MoneyGram, Ria, and Western Union, as well as offering its own branded services like “Walmart2Walmart” and “Walmart2World.”

Reforming Wire Transfer Practices

In response to the settlement, Walmart announced several changes. The company will no longer process money transfers suspected of being fraudulent and will cease assisting sellers or telemarketers deemed involved in wire fraud.

Improving Employee Training

Suzanne Sando from Javelin Strategy & Research noted that this settlement is significant, especially the emphasis on improving employee training. “Proper training is crucial for fraud prevention,” she stated, adding, “Large organizations often overlook this aspect but it’s a vital component of protecting consumers.” She also highlighted the concern about larger companies sometimes neglecting fraud prevention because of perceived low financial impact.