FTC Sues Walmart for Facilitating Money Transfer Fraud
ftc.gov
ftc.gov
Wow!
Did you win a lottery?
Are you claiming an inheritance?
Is this to help someone you know, but haven't spoken to?
Is this to pay a fine, tax or other government fee?
Seems pretty simple to rule out a lot of them.
He said, no, he knew it was real because they gave him the phone number for a bank and he called and the man on the other end confirmed it was real.
I implored him not to send any more money, but he continued to take out a postal money order for a few hundred dollars.
I told the cashier that he was being scammed after he left and they just said "ya, but what can you do?"
You can refuse to process the payment!
He had a hell of a time doing it, not even as a matter of international wire logistics, but convincing the bank staff to "allow" him to do so because they were "concerned he was being scammed".
On one hand I appreciated their concern, but as he told them, "Do you see my (very very uncommon) family name? See his? It's my son." "Well, have you spoken to your son? Did he ask you to send him money on Facebook?" "No, WE offered to send him a gift towards downpayment of a house." "How do you know this is his bank account details?" "Because I asked him for them and he gave them to me?"
He got ... quite frustrated.
Why do you consider "lawful" as the only measure of "good"?
How you balance this equation is the hard part that takes effort and deep thinking and the subject to much discussion in many fields of philosophy.
Being a maximalist is the road to stupid dogmatic behaviour. The path to radical extremism.
And some level of stupidity, either natural or appearing with age, qualifies people to lose their right to be stupid, ie. conservatorship. Unfortunately it is a very heavy legal process of a sledgehammer when i think in many cases it should be a surgeon knife.
Letting old people get scammed is unpleasant. Letting old people be disenfranchised by random clerks and passers by is substantially worse.
All the outcomes are bad, the one implied as an improvement here is much worse than the status quo.
Old people (or anyone) being scammed out of their life savings is bad. Full Stop.
What is worse is some random person in line being able to speak up and have someone's bank account effectively frozen. Yes, this story is about Walmart but the real issue is banks here, in my personal direct experience.
This topic is near and dear to me as I have personally seen how the banks do not consider money in your account to be your money - it is their money you can use in a prescribed manner. Step even a little off that reservation and you will find how much power others have over what you thought was your money. It can take months and years to resolve, and you generally have very little to no legal recourse.
Random dude in a line, or a random $18/hr bank/walmart cashier is not an appropriate place to put your fraud detection and denial systems in place. Advising a transaction is fraudulent is A-OK in my book. Having customers sign release forms - cool. Actually denying funds? This is something I, and others, find absolutely morally and ethically repugnant. Your money is yours to do with what you wish, including lighting it on fire. It is not your place to tell me I cannot do that.
Up until the point I do something illegal with my money, no one should have a single iota of say in how I spend, move, or deploy it.
It would absolutely be reasonable to continue fighting fraud by recognizing that these things can happen, and taking steps to combat them, without tilting it as far as you have seen in favor of banks essentially confiscating customer funds.
I sympathise with your position, but you cant have people awndong money to know drug dealera and terrorists and go "oh well, its their money" either
the additional angle to consoder is that we have duty of care to vupnerable individuals - elderly pwople and children.. like if a peraon with a degree in finance is buying crypto, no questions. but if someone in their 80s is investing in crypto becauae their neighbour tols them to, thats suspicious
i am writing this as someoje who currently can't send koney to family because the whole country has been sanctioned, so,
In this story the person in question did have their transaction questioned. Having it delayed is meaningless, there is no reason to believe a delay would have made them change their mind. This is a question of whether it is their money, the banks money or someone else's money and the correct answer is it belongs to the gentleman who is getting scammed. People will suffer less on average if we let them spend their own money as a matter of policy.
Which are abused nationwide
I think this is a good example of the limitations of this principle. It precludes social cohesion and mutual responsibility.
Maybe Walmart should be expected to employ people in these roles who are paid and trained well enough to be able to pass a test like "can you spot the most obvious scam that has ever scammed, at least once in a while?"
You obviously have a beef with Wal-Mart, writing essentially the same comment 4 times and seemingly ignoring the fact that virtually every supermarket and check-casher in the country has a similar employee running the Western Union desk.
My stance applies to them as well, if they have similarly weak policies on fraud.
just because zero fraud cant be achieved dows not mean we should have no anti fraud measures
The cashiers are giving the money to the scammer, not getting the money from the person being scammed.
The scammers, if they're any good, are probably not making chit-chat or doing anything to draw suspicion to themselves.
The alternative is many people's experience with a denial of service by a faceless fintech or paypal when they actually need it.
Since Walmart was the readily available trading depot, manual reviews would waste too much time. They couldn't tell the difference between someone churning for credit card signup bonuses, someone that was actually the victim of a bounced check scam and didn't know it yet as they were sending a money order for the difference as instructed by their scammer, or an actual member of a drug gang intentionally being a money mule from a drug transaction.
What you do is you contact the internal compliance department where they have the specialists with the necessary knowledge who will further pursue it.
That's drilled into every employee of a financial corporation.
If Wallmart wants to be in the banking business it's not too much to ask to set up such a structure.
Are you paying to claim lottery winnings?
Is a nigerian prince asking you to transfer money for them?
Has someone you don't know deposited money in your bank account and needs you to wire cash to someone else?
If the answer is yes to any of those, decline the transfer and give them a pamphlet on common scams. This would take care of about 90% of the problem.
Decline the transfer. You would be surprised on the latter though - people have walked their family through the scam, "No, I still think it's probably legit", even gotten police involved, "ma'am, these people online are scamming you", "But what if they're not?"
> In a sprawling, low-rise building abutting pasture land in New Castle, Delaware, HSBC’s anti-money laundering staff review customer transactions and so-called alerts generated when the bank’s monitoring systems spot a suspicious transaction.
> Former employees in the New Castle office describe a febrile boiler-room environment overseen by managers uninterested in investigating transactions with possible links to drug trafficking, terrorist financing, Iran and other countries under U.S. sanctions, and other illegal activities. Instead, they say, the single-minded focus was on clearing out the paperwork as fast as possible.
https://www.reuters.com/article/us-hsbc-compliance-delaware-...
https://en.wikipedia.org/wiki/Everett_Stern#HSBC_Money_laund...
https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...
Yes, they should probably be empowered to actually make decisions and trained to make them correctly. Is that asking so much?
> opposed to turning private companies into arms of federal law enforcement agencies.
does not explain this policy
> “If you suspect fraud, complete the transaction.”
If there is suspicion of fraud and yet still direct your employees complete the transaction, sure, maybe you're not literally in favor of fraud. But it does mean that you don't care if there's fraud. There's little daylight between not caring about fraud and being in favor of it at Walmart's scale.
does not explain this policy
> “If you suspect fraud, complete the transaction.”
Sure it does. It's not Walmart's job to investigate fraud or any other crime. Their cashier's aren't trained in jurisprudence. And, frankly, a corporate policy of "deny service to customers who you suspect might be up to no good" is just a few racist employees away from another shit show entirely.
Other approaches exist too. But doing absolutely nothing and quietly proceeding with the transaction is just hostile to your most vulnerable customers.
In a town near me, the store generates ~3000 arrests a year, to the point that the town has a police substation on the premises.
Of first time shoplifters? I find this incredible, as when I worked Walmart (admittedly eons ago) you had to be a very well known repeat offender to get caught. Everyone else would simply be yelled at to leave at best.
Target (from friends at the time) even had a policy to simply let thieves do their thing and document until they hit the threshold for a felony - at which time they'd take action.
Just that repeat offender list ended up with an arrest maybe every other day or so though.
I find it amazing society has changed that much in such a relatively short time. I know every store/location is different but this stat definitely blew my mine.
most of crime in the world is not petty shoplifting, its financial fraud amd much of it is done under corporate veil
People should be trained to detect fraud if that's necessary. But saying "don't try to detect fraud" to random-ass employees whose job is not fraud detection seems eminently reasonable to me.
It's not reasonable because of the first sentence. If you're dealing with other people's money, your employees should be trained to detect fraud. If you can't be bothered to ensure that, you shouldn't be dealing with other people's money.
The article doesn't say whether the policy instructed employees to report the suspected fraud afterwards.
There are Republican AGs going after fraud cases all the time, you just don't read about it in national news.
For what it's worth, the FTC did not "charge" them with anything. Walmart is being sued for some pretty specific violations not of "regs" but of laws: https://www.ftc.gov/system/files/ftc_gov/pdf/1823012WalmartC...
Walmart will have their day in court, and they certainly can afford plenty of lawyers. I have no concern at all for the well-remunerated executives at the top of this business, who will face no legal consequences for their personal profit from hundreds of millions of dollars in fraud.
By your logic, virtually every single business owner on the planet would be guilty of whatever you're accusing the Walmart execs of. Cars, computers, paper, pens, phones, wire, etc etc etc. There are very few popular products or services that don't facilitate criminal/antisocial behavior in some capacity.
But there are important differences between scam calls and money transfer. The most obvious one is that big mobile companies don't profit significantly from scam calls. Another is that the big mobile companies are working quite aggressively to keep dubious callers off their networks.
Consider, on the other hand, that assorted fly-by-night telecoms providers are scammer-friendly, in the same way that a small number of network providers are friendly to spam, child porn, and other criminal activity. Those people are, in the FTC's phrasing, turning a blind eye. I'd be fine with that being made illegal in the same way it's illegal to fence stolen goods.
This is an obvious and necessary outcome; otherwise you could very well excuse just about any failing as just the legal misdeed of an isolated employee.
For example, consider the non-university Trump University, which was shut down and which Trump paid $25m to settle the lawsuits over: https://en.wikipedia.org/wiki/Trump_University
He in fact has a long history of stiffing contractors, mistreating workers, tax fraud, and other dodgy dealings: https://www.theatlantic.com/politics/archive/2017/01/donald-...
Given that, it seems almost reasonable that he'd appoint business regulators who were ok with pretty much anything. It would be of a piece with his eagerness to make overseas bribery easier: https://www.nytimes.com/2020/01/15/business/economy/trump-br...
The person writing this should have walked away from this and report it. The person signing off on this as well.
Huh.
money transfer industry is not so consolidated.
Thankfully I was giving her a ride that day. She was in a total panic but wouldn’t tell me what was going on. He had her convinced that if she said anything she was gonna go to jail.
I thought they were having her do a night money drop off by herself which I was pissed about.
She went into a Kroger to the finance counter. Which is when I finally realized what was going on.
The lady at the counter was totally gonna let her send several thousand dollars to some random Green dot account.
So I asked if the lady could go get the store manager real quick.
Older lady walks up and says “oh you’re being scammed” My daughter burst into tears as she finally realizes she had just robbed her own store.
Store manager regaled us with tons of stories of scams people were constantly trying to run on them many of them incredibly elaborate.
If I hadn’t been there good chance she would be arrested.
A painful life lesson.
Second, the IRS may call you (an auditor did call me once) but they just tell you that a letter is in the mail. All their correspondence is verifiable by calling the office.
Third, they know your SSN. It's on the 1040. They will not call and ask you for it.
Fourth (applies to all callers, like banks, too), they don't call and ask for your PIN. If they do, find out how reach them from the main number, and never give a PIN to someone you don't know who called you.
She didn’t get fired. Boss was initially sympathetic. But she lost her promotion. Then had hours cut. So she had to leave.
Also from his standpoint, he doesn’t know for sure if she was being scammed. She could have taken money then gotten cold feet and made up story.
It’s a crap situation.
Money person at Grocery store also showed poor judgment. I had to ask for the store manager. Which is what article is referencing.
Not saying anything about your daughter (don't know her), but there's an easy way to tell: get the phone records and verify the "conversation" took place. It should have lasted longer than 30 seconds.
One simple trick unravels 90% of the "someone else made me do it" clusterfucks.
They convinced the daughter to take cash (from the register? from the safe?) to another store and almost convinced her send it to a green dot card (some kind of debit card?).
An auditor, or a voice on a phone?
Sincerely, totally honest guy.
A friend's mother got an email from her synagogue, with the rabbi's name and everything, asking her to buy some gift cards to surprise some other (named) officials.
It's pretty darn advanced, and can extend to texts, etc. If you don't know 'how your president talks' you can easily be bamboozled (we cover it in onboarding now, and have identified people they can always go to with questions).
But he never stopped taking and never let her put phone down. Never gave her a moment to think.
Is kind of an ironic comment for a Fox affiliate to publish.
if you suspect fraud and fear violence, give then marked bills and call the authorities
Once as a contractor in the early 2000s I did a few months at tracfone. While not scamming people directly they definitely knew a lot of their business was people needing phones for shady stuff.
Apple - https://applecash.greendot.com/termsconditions/
Uber - https://m.gobank.com/uber/noworries
Walmart - https://www.walmartmoneycard.com/legal-info
[edit] formatting
(fwiw, this is exactly why Walmart gave up on the manual review. Volume and time.)
What's next, fine Walmart for selling junk food because people are getting fat and dying (by the way much more costly problem than scam transfers).
That's a nice thought. How do you propose we meet the former when the alternatives for preventing the latter would result in increased costs being passed to those consumers?
Alas, nearly every problem in the US stems from politics. A problem which could have been solved easily will keep being a problem for another decade.
Regulators could have solved the problem at its root and make the scams impossible, but no, they would rather shoot the messenger and force money transfer service to do government's job. At the expense of everyone else.
It's just like dealing with many differnt large codebases that has multiple language, is managed by multiple different departments and teams.
The same thing happened in Big Tech. Bugs are usually not fixed until they become a critical issue, not because they can't be, the solution is either too simple and not worth it (allocating resource to it become negative return because it's not aligned with the companies goal or KPI, so any second you spent on it, is like you're doing it in your free time, no one in the company will appreciate the effort) OR it's too complicated and there's no easy way out without some party compromising.
In the end, a bug or something that could actually improve UX, is simply dismissed because how you felt is less important than the data and figures.
I think making transferring money much faster/easier instead of the current ACH system would help.
But I’m assuming you’re thinking of other things.
Require physical presence in the bank with machine readable biometrics passport for account opening (just like everywhere else) and boom, half the fraud schemes are gone. US forced all other countries in this world to require physical presence in the bank (great initiative, btw), but made an exception to themselves.
Require machine-readable passport with biometrics for large cash withdrawals (just like everywhere else).
Create a centralized, machine-readable, PKI-enabled proper identification infrastructure (just like everywhere else) instead of painted plastic which they call driver licenses, create a centralized, unified, secure registry of all people instead of using SSN and boom, the rest of fraud schemes become useless.
Just start with this, easy to implement, simple solutions which will pay for themselves in a few years. No need to invent a bicycle, numerous countries went this way long time ago, there are no unknowns on this path.
Alas, again, politics.
What do you mean by everywhere else? I'm not required to have a passport for large cash withdrawals in Switzerland, a normal id card is enough.
I wish we had all that here in the US.
There is a good balance between security, efficiency and privacy in Switzerland. US should emulate CH.
The problem with that in the US is that the US - unlike almost every other developed nation - doesn't have a requirement for people to possess a government issued ID card or a passport. The reasons for this are multiple: right-wing/"sovereign citizen"-type of people afraid of the government building databases or whatever, people exploiting illegal immigrants (aka well-connected farmers and meatpackers) who would not be able to pay their staff, and people on the left who see it as yet another expense to be paid by poor people.
US, perhaps, is the only developed country with gift card scams problem.
I couldn't think of a worse gift than a gift card. It has same level of thoughtlessness as gifting someone a bunch of cash, but brings them less utility because they're constrained to spending it at a specific store unless they on-sell the card at a haircut from the face value.
For one, crack down on caller ID fraud so people from scam call centers in India can't impersonate the IRS or whomever else. Next, require phone carriers to combat robo-dialers in general, even with correct numbers these are a plague.
Not sure the legality on requiring this sort of ID for financial transactions though.
I trust they finally will do the right thing. After having tried everything else of course.
This is an important distinction. The actual money transfer service is not the issue in this specific case.
These days, I think Walmart is not the easiest route to liquidate gift cards though. They used to allow some silly things like combining many gift cards to buy one money order, but are at least supposed to restrict it now.
(I have not passed the bar, this is not formal legal advice)
Chase still offers big incentives on office supply stores, so that's probably the main driver of MS right now aside from sign-up bonuses. Staples quite frequently offers $0 fees on their gift cards to encourage this.
https://www.nerdwallet.com/article/credit-cards/credit-card-...
https://viewfromthewing.com/free-miles-for-churning-presiden...
Presumably the mint was eating the credit card fees on this, so effectively it was a transfer of money from the government to the churner, with the credit card company keeping some amount on the way.
So yes, a transfer of money from the government to the purchaser, but with a lot more steps.
Don't forget the free shipping. The USPS probably got paid by the mint.
https://www.nerdwallet.com/article/credit-cards/credit-card-...
> for many years, consumers have reported tens of millions of dollars annually in fraud-induced money transfers processed by Walmart employees. [...] Walmart is well aware that telemarketing and other mass marketing frauds, such as “grandparent” scams, lottery scams, and government agent impersonator scams, induce people to use Walmart’s money transfer services to send money to domestic and international fraud rings.
Sounds like the typical "Hello, this is the IRS calling" or "We will shut off your electricity soon" telemarketing scams; they tell the victim to send money to them (the scammers) using Walmart's services.