Walmart Settles FTC Fraud Case for $10M Over Money Transfer Scams

Walmart has agreed to pay $10 million to settle a U.S. Federal Trade Commission (FTC) lawsuit accusing the retail giant of enabling money transfer fraud. The FTC alleged that Walmart failed to act on warning signs as scammers exploited its money transfer services to defraud consumers of hundreds of millions of dollars.

The proposed settlement, filed in a Chicago federal court, awaits approval by U.S. District Judge Manish Shah. While Walmart did not admit wrongdoing, the company pledged to enhance its fraud prevention protocols. Under the agreement, Walmart must block suspicious transactions and avoid aiding telemarketers or sellers suspected of fraud.

According to the FTC, scammers used Walmart’s services—acting as an agent for providers like MoneyGram, Ria, and Western Union—to carry out deceptive schemes. These included impersonating IRS agents, posing as relatives in distress, and claiming lottery winnings that required upfront fees.

“Scammers often demand money transfers because once funds are sent, they’re nearly impossible to recover,” said Christopher Mufarrige, director of the FTC’s consumer protection bureau. He emphasized that businesses handling such transactions must train staff to spot fraud and protect consumers.

Walmart stated it shares the FTC’s goal of safeguarding customers and was pleased to resolve the matter. The original FTC lawsuit, filed in June 2022, accused the Arkansas-based retailer of ignoring clear red flags at its stores.

Though a portion of the case was dismissed in July 2023, the court allowed the FTC to proceed with key claims. Walmart later appealed the decision. This settlement will end that appeal process.

The case, titled Federal Trade Commission v. Walmart Inc., is being heard in the U.S. District Court, Northern District of Illinois, case number 22-03372.