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Comment by granzymes | Hacker News Reader

For years, according to the complaint, it was Walmart’s stated policy for its employees to issue payouts even in the case of a suspicious money transfer, making it easy for scammers to retrieve fraud proceeds at a Walmart location. The complaint cites a Walmart reference guide for employees that stated: “If you suspect fraud, complete the transaction.”

Wow!

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I would expect cashiers suspecting fraud would have a high and probably discriminatory false positive rate. I wouldn't be surprised if it also sucked at detecting any actual fraud

I'd bet many cases were obvious. How many people told the employees they were paying IRS fees? Or that they had a long lost relative who contacted them? Many of these scams aren't sophisticated and the people falling for them are gullible. It's not hard to imagine that an employee with a bit more sense than the customer could have simply been told what's happening and realized it's probably illegitimate.

Walmart cashiers by and large are not sophisticated either. I mean that sounds harsh but these are not people walking in with a lot of financial savvy. Without training and reminders I would not think they would be any more likely to identify these scams than the victims are.

Maybe they shouldn't be in that role then.

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?"

Perhaps, as you suggest, Wal-Mart should hire high-paid, well-trained executives from PayPal, Zelle, CashApp, Venmo or other services. God knows there's never been fraudulent transactions or scams on those platforms.

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.

Well if those companies have fraud then WalMart just shouldn't even try. Your logic is impeccable.

Impeccable? You've made up your mind based solely on the accusation (which 2 of the 5 Commissioners voted against). I prefer waiting until the defense gets its say.

Yes, you're right. There's no middle ground between "3 hour morning training on using the Western Union console" and "fintech antifraud executive", none at all.

The point is that both groups are unable to prevent fraud.

you have presented no evidence to support this claim. There coupd be 100x more fraud with wallmart payments.

just because zero fraud cant be achieved dows not mean we should have no anti fraud measures

> 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.

Western Union had a check list of questions to ask if certain amounts / destinations were met.

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.

I was chatting with an elderly man in front of me in line at the post office years ago. He was complaining that he had already paid so many fees but was really close to collecting his winnings from the Australian lottery (we were in the US). And according to him, he never even entered the lottery. I told him that this was a common scam and that they were simply stealing his money and to not send them anymore.

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!

Why do you consider yourself or the cashier to be in position to deny the man his lawful right to be stupid?

Well, if one sees a crime being committed against an elderly person, it is kind of an recognized social duty to intercede, though really there seems to be no good practical way of doing so in the case like this.

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.

I personally consider conservatorship immoral. "We know better so you are better off being my slave"

well its meant for folks that literwlly no longwr function, like late stage Alzheimer and what not

There is a raw question of power here - who has final say over how the money gets spent? They own the money.

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.

You see old people losing their life savings—the only money they have to live on—as being better than them having certain very obviously fraudulent financial transactions questioned, and potentially delayed?

This is an incredibly disengenious take.

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 sounds to me like what you're criticizing is one particular method of addressing the problem, rather than the general idea that we need to address the problem.

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.

Well, suppose we learnt with 100% certainty that a spesific bank account belongs to dangerous criminals - surely we should not be allowing money transfers to that account - either you are beinflg scammed, or you are financing crime on purpose.

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,

I see a the risk of some very cynical younger people who will discover that (while the loving bonds of family are all very well) they can make money by seizing their parents assets. There are some real monsters out there, especially once there is money on the line. Family courts go through horror cases on a daily basis. That risk of elder abuse is worse than scammers and much more pressing.

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.

>And some level of stupidity, either natural or appearing with age, qualifies people to lose their right to be stupid, ie. conservatorship.

Which are abused nationwide

Why do you consider that total freedom of an oblivious individual fucking their finances is a good thing for society? As a society we are actually here to help others with our experiences, if the experience of a cashier with multiple fraudulent transactions can help a soul to not be a sucker, why shouldn't they use that power?

Why do you consider "lawful" as the only measure of "good"?

Freedom is important

Avoiding financial distress and/or ruin is important as well.

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.

Those are not even in the same league

Those what? I feel you aren't really interested in engaging on a discussion here, throwing hot takes and platitudes isn't very conducive to have a conversation...

"The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others." (J.S. Mill).

I think this is a good example of the limitations of this principle. It precludes social cohesion and mutual responsibility.

My father, who is in his 70s, and mentally very sharp, although a little hard of hearing, was trying to organize a wire transfer from Australia to me in the US for around $25K.

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.

Frustrating, but I think a necessary thing considering how common older people are scammed. The name you are wiring to doesn't necessarily mean anything. And it is a very common scam for people to impersonate overseas family members and ask for money. So good on them for doing some due diligence. Especially someone who is hard of hearing can be susceptible to this type of scam because it may be more difficult to recognize a loved one's voice over the phone.

> making it easy for scammers to retrieve fraud proceeds at a Walmart location.

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.

It's both. Walmart is on both sides of many of the transactions, and they have allegedly been negligent on both.

I am a minority, but every time a minority comes in, i tell them take their business elsewhere. After 30 years, you just know by how they walk. If some woke person analyzed this, they will definitely be correct.

That's because they can't tell.

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.

This is preferable. I wouldn't trust a cashier to detect fraud in any trustworthy rate. That wording in the guideline is important. Suspicion of fraud is not fraud. Acting upon employee suspicion would just skyrocket costumer outbursts and complaints.

Then they should employ and train people in these roles who could be trusted to do that.

In finance it's not that you pick up the phone and call the Money Laundering Hotline of the responsible regulator.

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.

Have the employee ask 3 questions.

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.

> 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?"

Reminds of HSBC - look the othere way...

> 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...

This is similar to how the city of London police financial crimes unit operate.

Let's not forget about Danske Bank who laundered 200 bilion dollars in Russian money until get caught..

https://en.wikipedia.org/wiki/Danske_Bank_money_laundering_s...

And yet two commissioners voted "no". Wanna guess who appointed them?

Some people are philosophically opposed to turning private companies into arms of federal law enforcement agencies. That doesn't mean they are in favor of fraud.

There are people philosophically opposed to laws against facilitating fraud? In many cases, the fraudsters hired on with Walmart and the company profited from these transfers.

I have a hard time believing that Walmart actually knew or intended for fraud to occur. I dont think they should be charged unless there is evidence they sought to facilitate fraud or violated some other law. These FTC regs are so vague they could charge any company for anything and I dont trust govt not to abuse that power

Only philosophical questions today! Who but the Walmart workers are Walmart? Of course the actions of their workers, in case they are fraudsters, are also the actions of Walmart, who graciously provided them it's infrastructure; it's complicity in the scam is what has to be established. In this case, the FTC found overt evidence that they were well aware of their complicity and chose to ignore it, across leadership. Hence this lawsuit.

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.

I think the more useful standard here is "knew or should have known". They would have had to have been literal children to not ever hear that money transfer services could be useful to scammers. So assuming the executives were actual adults, they either knew or should have known that they were party to and profiting from large-scale fraud.

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.

Scam calls are also quite prolific, and the executives at big mobile companies are aware of this fact, that doesn't make them criminals.

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.

Where did I say they were criminals? The FTC doesn't think so.

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.

The answer is a lot simpler than that, which is that it looks good politically for them to oppose Democrats and voting no doesn't actually do anything so it's safe to do so.

There are Republican AGs going after fraud cases all the time, you just don't read about it in national news.

This concern

> 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.

I think you're off a bit here. Not everyone is a fraud detection specialist. If Wal-mart had implemented the "trust your gut" policy you're advocating for, you're just going to get Ethiopian grandmas trying to cash out money from their grandkids and some random-ass Walmart employee deciding it's fraud because "she looks suspicious" or some nonsense and then she can't pay her rent.

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.

> 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.

This concern > opposed to turning private companies into arms of federal law enforcement agencies.

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.

There are many ways to handle suspected fraud. One completely reasonable approach would be to talk to customers about scams if fraud is suspected. You can still leave it up to the customer to decide to go through with the transaction.

Other approaches exist too. But doing absolutely nothing and quietly proceeding with the transaction is just hostile to your most vulnerable customers.

Funny, when Walmart’s money is involved, they have no problem having untrained staff harass, profile and intimidate customers suspected of not following store policy.

I feel like you are speaking without knowledge, because it usually take an extraordinary amount of blatant repeat theft for the loss protection team to act against an individual. Solo one-time shoplifters have close to a 100% chance of success without being apprehended.

There’s a well established, well documented pattern of conduct by Walmart that suggests otherwise.

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.

Comparing blatant theft of physical property to a possible financial scam, the latter of which the company has nowhere near the context required to make a determination on, seems a bit disingenuous, no?

comparing theft of a $5 tshirt or whatever to scams worth thousands of dollars is what seems disingenuous.

most of crime in the world is not petty shoplifting, its financial fraud amd much of it is done under corporate veil

> In a town near me, the store generates ~3000 arrests a year

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.

Depends on the location/state of the store

These are valid concerns. But both options are extremes. There's a lot of middle ground between don't complete any suspected fraud transactions and always complete suspected fraud transactions.

Most retailers also tell their employees to let theifs get away rather than physically confront them. Doesn't mean they "don't care if there's" theft. Of course they care! They just want the relevant authorities to deal with it instead of putting their employees in potentially dangerous situations.

The article doesn't say whether the policy instructed employees to report the suspected fraud afterwards.

It wouldn’t surprise me if in a few years the same AGs sue Walmart and Western Union for allowing employees to suspect fraud for the wrong reasons and denying transactions.

> for the wrong reasons

Yes, they should probably be empowered to actually make decisions and trained to make them correctly. Is that asking so much?

Yeah it is asking too much. We have software engineers who couldn't write a sorry ass CRUD app while collecting $100K pa salaries. All the training and salary doesn't mean shit. With volume Walmart might be processing this kind of fraud is within cost of doing business.

Then Walmart shouldn't be in this business if it's literally impossible for them to train and employ the people necessary to do it somewhere in the neighborhood of correctly.

Would you prefer their books have to be open to the government for inspection to look for the fraud?

That's the current reality.

Should everything be driven down to partisan politics? There are tons of reasons why Walmart would not want its employees to be judge and jury in identifying fraud and some of the others would have felt that is the right approach.

It doesn't even have to be partisan. Donald Trump could just like fraud.

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...

How does that manual pass even make it to employees hands?

> “If you suspect fraud, complete the transaction.”

The person writing this should have walked away from this and report it. The person signing off on this as well.

So the customers should be considered criminals until proven otherwise...smart FTC

looks over at the Visa/Mastercard porn thread full of people lecturing us all about how corporations can't knowingly do business with people/companies breaking the law

Huh.

I'm not familiar with regulations on credit card organizations, but I would guess their responsibilities are closer to those of banks than Walmart's responsibilities. I spent more than a decade at an investment bank, and it's pretty heavily regulated.

the issue with Visa/mastercard is not their near-monopoly status, so they can arbitrarily decide to sink your business.

money transfer industry is not so consolidated.

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