Walmart pursues dismissal of FTC money transfer lawsuit

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Early last week, Walmart asked the federal court handling the FTC’s lawsuit into money transfer fraud to dismiss it. Walmart’s brief lays out several reasons why the FTC’s case is legally flawed and shouldn’t go forward.

Walmart pursues dismissal of  money transfer lawsuit

A narrowly divided Federal Trade Commission (“FTC”) has “filed a misguided lawsuit against Walmart” regarding money transfer services that the Company offers to consumers.

What you need to know about the lawsuit:

Since Walmart began offering its customers money transfer services, the company says it has saved consumers—particularly the unbanked and underbanked— an estimated $6 billion in fees by bringing important competition to the money transfer industry.

Walmart says it has a robust anti-fraud program to help stop third-party criminals who try to use money transfer services to commit fraud, and only a miniscule number of transactions are even alleged to be fraudulent. In fact, Walmart claims, it has stopped hundreds of thousands of suspicious transactions totalling hundreds of millions of dollars.

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Despite Walmart’s anti-fraud programs, the FTC is trying to blame the Company for actions by third parties, including fraud the FTC has already acknowledged was caused by another company—while that company was under federal government oversight through a compliance monitor, and during a period when that company’s own fraud prevention system had failed.

This civil lawsuit is factually misguided and legally flawed, says Walmart. In fact, it was approved by the FTC by the narrowest of margins after Chair Lina Khan refused Walmart the due process of hearing directly from the company, and then the Department of Justice refused to take the case to court.

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Despite the fact that the Justice Department took a pass on this lawsuit and two of the FTC’s own Commissioners voted against it, the FTC has chosen to pursue a “misguided” lawsuit that “distorts existing law by attempting to hold Walmart strictly liable for the wrongdoing of third-party criminals, despite all our efforts to stop fraudsters”.

Walmart will defend against this lawsuit aggressively.

Read more about the arguments in Walmart’s motion to dismiss here.


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