Walmart Says FTC Lawsuit Over Money Transfers Is ‘Overreach’

Walmart on Monday (Aug. 29) asked a federal court to dismiss a Federal Trade Commission lawsuit against the retailer, calling the case “an egregious instance of agency overreach.”

“The FTC is trying to hold Walmart liable for the criminal actions of completely unrelated third-party fraudsters, in spite of Walmart’s extensive efforts to prevent those very fraudsters from defrauding our customers, and despite the FTC’s lack of constitutional or statutory authority to bring the lawsuit,” the retailer said in a news release.

Read more: FTC Takes Walmart to Court Over Money Transfer Fraud Allegations

The company added that it remained “dedicated to its customers,” and shares the FTC’s goal of guarding customers against fraud.

The consumer watchdog sued Walmart in June, alleging that the retailer’s money transfer services had been corrupted by fraudsters, leading to consumers being — in the FTC’s words — “fleeced out of hundreds of millions of dollars.”

In its statement, the government agency claims Walmart had “turned a blind eye for years” as scammers took advantage of the retail giant’s lack of security for money transfer services.

The FTC also alleges that Walmart didn’t properly train its employees or warn customers about the risks. It also reportedly used procedures that allowed fraudsters to cash out at its stores.

“While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Consumers have lost hundreds of millions, and the Commission is holding Walmart accountable for letting fraudsters fleece its customers.”

Walmart responded at the time that the FTC was “narrowly divided” and that the civil suit was “factually flawed and legally baseless.” The company also said the commission had refused Walmart due process of hearing directly from the company.