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Walmart seeks to dismiss lawsuit by FTC over money transfers

NY — Walmart filed a motion on Monday to dismiss case by the Federal Trade Commission in June that accused the country’s largest retailer of allowing its money transfer services to be utilized by scam artists, calling it an egregious instance of agency overreach.

In its lawsuit, the FTC alleged that for a long time, Walmart didn’t properly secure the amount of money transfer services offered by its stores, stealing vast sums of dollars” from customers. The agency said Walmart didnt properly train its employees, didn’t alert customers, and used procedures that allowed fraudsters to cash out at its stores. The FTC had asked the court to order Walmart to come back money to consumers also to impose civil penalties on the business.

In a 41-page document, filed in U.S. District Court for the Northern District of Illinois Eastern Division, Walmart organized several what it called legally flawed claims, including that the agency lacked constitutionally valid authority to sue for the money or injunctive relief. It said that the FTC is wanting to carry Walmart responsible for the criminal actions of completely unrelated third-party fraudsters even while Walmart has embraced numerous steps to avoid such scamming.

Walmart argued that the agency is wanting to contort a regulation called the Telemarketing Sales Rule that has been aimed to follow telemarketers and the ones who actively help them but that Walmart is neither. Walmart also took issue with the FTC’s declare that Walmart allegedly engaged within an unfair” act or practice, or any ongoing or imminent misconduct under Section 5 of the FTC Act.

To be clear, Walmart is nowand always has beendedicated to its customers and shares the FTCs goal of protecting customers from fraudsters,” the Walmart filing said. “But this lawsuit can be an egregious instance of agency overreach.”

Walmart stores let shoppers to transfer money using three providers MoneyGram, Ria Financial Services, and Western Union Co.

Walmart, located in Bentonville, Arkansas, said it is rolling out and implemented a bunch of anti-fraud measuresincluding customer warnings and employee trainings. Predicated on data open to Walmart, out of nearly 200 million money-transfer transactions processed at its U.S. namesake stores between 2015 and 2020, significantly less than 0.08% were reportedly the merchandise of fraud, based on the Walmart filing. Also it said that a few of that reported fraud might not be fraud at all, making the specific fraud rate even smaller.

In its argument by Walmart that the FTC overreached in its authority, Walmart cited a April 2021 Supreme Court case that means it is problematic for the agency to activate in a long-time practice of wanting to recover ill-gotten gains from individuals or companies that steal from consumers. Because of the ruling, the agency will will have to depend on other lengthier and much more complicated legal maneuvers to recoup dollars from defrauded individuals.

FTC officials couldn’t be immediately reached for comment.

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