FTC sues Walmart, says retailer should have done more to protect scam victims

CHARLOTTE — Channel 9 is constantly warning you about scams. Action 9 has reported on many scams that involve a victim going to a store to buy gift cards or transfer money to the criminal.

Sometimes, someone from the store will ask questions and step in, saving the person from getting scammed. But at other times, they don’t.

A big part of Walmart’s business involves financial services, such as money transfers, check cashing, and prepaid debit cards.

Now, the Federal Trade Commission is suing Walmart, saying the retailer knew about the role its money services played in scams. The agency says Walmart did not train its employees well nor have the right procedures in place, and it did not warn customers enough.

According to the FTC, victims lost more than $197 million between 2013 and 2018. The agency is demanding that Walmart pay all those victims back and pay civil penalties.

Yet Action 9′s Jason Stoogenke has come across cases where Walmart employees sensed a scam and intervened. In 2017, the mother of an Indian Trail teenager told Stoogenke that her son almost sent scammers hundreds of dollars, but Walmart noticed the red flags and stopped him from losing the money.

“It was huge. That’s why I went back to them with tears, and I told the manager, ‘I just want you to know, thank you for doing your job,’” Karen Ernsberger said.

Walmart issued the following statement:

“A narrowly divided Federal Trade Commission (FTC) brought this factually flawed and legally baseless civil lawsuit after the Chair refused Walmart the due process of hearing directly from the company, and even the Justice Department refused to take this case to court.

“Claiming an unprecedented expansion of the FTC’s authority, the agency seeks to blame Walmart for fraud that the agency already attributed to another company while that company was under the federal government’s direct supervision.

“Walmart will defend the company’s robust anti-fraud efforts that have helped protect countless consumers, all while Walmart has driven down prices and saved consumers an estimated $6 billion in money transfer fees.”

Walmart has posted a blog titled, “FTC Lawsuit Against Walmart is Unfounded and Ignores the Billions Walmart has Saved Customers” here.

The company has also filed a Freedom of Information Act request, asking for documents on how the FTC handled this case.

The FTC has gone after other companies such as MoneyGram and Western Union, saying they should have done a better job in protecting consumers from scams.

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