In a case of negligence, Walmart was forced to pay $10 million in a settlement with the Federal Trade Commission (FTC) over allegations of enabling wire fraud.
The federal government claimed America’s largest retailer did not do enough to prevent scammers from using its money transfer services, affecting countless hardworking Americans who lost their hard-earned savings.
This week, the FTC announced the settlement, ending a three-year legal battle that began when the agency filed its initial complaint in June 2022.
According to the government, Walmart allegedly allowed scammers to use its money transfer services from 2013 to 2018, resulting in hundreds of millions of dollars being stolen from unsuspecting consumers.
In what appears to be typical government overreach, the federal agency accused Walmart of lacking effective anti-fraud policies, failing to train employees adequately, and not properly warning customers about potential fraud risks.
Despite agreeing to the settlement, Walmart stood its ground and refused to admit any wrongdoing, calling the FTC’s case an example of regulatory overreach.
The retail giant has consistently maintained that it was being unfairly targeted while providing a valuable service to Americans needing accessible financial services.
Moreover, the agreement requires Walmart to implement new fraud detection and prevention measures, potentially adding more bureaucratic red tape to services that many Americans rely on.
The FTC’s demands follow a pattern of government agencies imposing increasingly burdensome regulations on businesses, which ultimately drives up consumer costs.
Notably, the courts already dismissed some of the FTC’s more aggressive claims twice.
The agency’s original complaint included allegations of telemarketing violations under the Telemarketing Sales Rule.
However, a federal district court rejected these claims in July 2024, partially reversing the government’s overreach.
The Seventh Circuit Court of Appeals even allowed Walmart to appeal parts of the district court’s rulings on core fraud claims in November 2024, suggesting skepticism about some aspects of the government’s case.
Despite these legal victories, Walmart ultimately decided to settle rather than continue a costly legal battle against the federal bureaucracy.
The FTC approved the settlement in a 3-0 vote and filed it in the U.S. District Court for the Northern District of Illinois.
While dealing with government regulators, Walmart continues to focus on improving its business to serve American consumers better.
The company is enhancing its shopping experience to compete with Amazon by integrating content consumption with shopping intent and leveraging its acquisition of Vizio to test shoppable ads on smart TVs.
