A Major Player in Wire Transfers
Walmart processes a staggering number of wire transfers annually. From 2013 to 2018, the company facilitated nearly $200 million in payments that were later determined to be fraudulent.
Significant Shortcomings in Safeguards
The Federal Trade Commission (FTC) found that despite handling such a large volume of transfers, Walmart failed to implement basic anti-fraud measures. The FTC’s investigation revealed that the retail giant lacked employee training and customer alerts designed to prevent fraud.
Walmart Continued Processing Despite Suspicions
The complaint also highlighted instances where Walmart processed transactions even when there was suspicion of fraud. A reference guide used by employees advised that If you suspect fraud, complete the transaction,” according to the FTC.
No Effective Measures in Place
Walmart allowed criminals to use its services for fraudulent purposes without implementing policies to detect and prevent such activity,” stated the FTC. “In some cases, Walmart’s practices facilitated fraud, making it easier for scammers to withdraw money from the store.”
Walmart’s Commitment to Change
In response to these allegations, Walmart agreed to a $10 million settlement. The company now pledges not to process suspected fraudulent transactions and will no longer assist sellers or telemarketers associated with wire fraud.
Expert Perspectives
Suzanne Sando, Lead Analyst of Fraud Management at Javelin Strategy & Research, commended the move towards stronger anti-fraud measures. “Improving employee training is crucial,” she emphasized. “Often overlooked, it’s a significant aspect in fraud prevention.”
She added: While Walmart might not have had direct intent to aid fraudsters, larger organizations frequently adopt an attitude that if something doesn’t impact their bottom line or cost significantly, they can neglect it. This mindset ultimately harms consumers.”
Conclusion
The case highlights the importance of robust internal controls in preventing and detecting fraudulent activities in financial services, particularly within large corporations like Walmart.
