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FTC Sues Walmart for Facilitating Money Transfer Fraud
- mrlatinos 4y agoWhat implications does this have on churning?
- malux85 4y agoWhat is churning in this context?
- sokoloff 4y agoTaking unusual actions to harvest credit card rewards. https://www.nerdwallet.com/article/credit-cards/credit-card-churning https://www.nerdwallet.com/article/credit-cards/credit-card-...
- rtkwe 4y agoCredit card rewards churning probably. Basically finding cards with either attractive starting offers or ongoing rewards and then generating cash flow through them that is recurring. One example was the mint at one point was selling some coin online with free shipping, after receiving the coins you'd just deposit them into your account for zero loss. It looked like a normal purchase to the CC so you got the full points for it. https://www.nerdwallet.com/article/credit-cards/credit-card-churning https://www.nerdwallet.com/article/credit-cards/credit-card-... https://viewfromthewing.com/free-miles-for-churning-presidential-coins-from-the-us-mint/ https://viewfromthewing.com/free-miles-for-churning-presiden...
- klipt 4y ago> One example was the mint at one point was selling some coin online with free shipping, after receiving the coins you'd just deposit them into your account for zero loss. It looked like a normal purchase to the CC so you got the full points for it. 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.
- pxx 4y agoThe mint actually wanted to get rid of the dollar coins that they were accumulating storage fees on. Congress decided to make the mint mint way too many dollar coins (and prohibited it from advertising) and nobody wanted them. Once people ordered and deposited them they'd make their way to the Federal Reserve and were no longer the mint's problem. 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.
- kryptn 4y agoProbably none, given this complaint is focused on money services Walmart provides.
- tehwebguy 4y agoWalmart Money Center has been a pretty large component of "manufactured spending" which is not the same thing as churning but churning is often used as an umbrella term for all point earning hacks activities.
- iancarroll 4y agoYeah, it would be hard for churning/MS to exist without Walmart. You can buy Visa/MC gift cards with a credit card, turn them into money orders at Walmart (via running them as "debit"), and deposit those into most banks at a ~1% total loss. 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.
- rafale 4y agoIs manufactured spending legal? It sounds like abusing an electronic and wire system.
- iancarroll 4y agoSounds like you are alluding to wire fraud, but you would be doing something wrong if you are defrauding anyone. You are just sending money to yourself, via a fairly high-surveillance method (Walmart will check your ID, you have to deposit it into a real bank account, etc).
- cmeacham98 4y agoYes, at least in the US. CC merchants are constantly fighting this behavior and limiting what counts for the purpose of the reward via their Ts&Cs. (I have not passed the bar, this is not formal legal advice)
- paulpauper 4y agonothing.. they are not the same thing
- treeman79 4y agoDaughter nearly fell victim to one of these. An auditor over the course of 2 hours convinced her that the store manager was stealing money and that she needed to transfer it back to corporate. 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.
- PeopleB4Cars 4y agoThis sounds like a separate, but related novel version of these scams that target Walmart's employee. You might want to report this to the FTC via the contact info in the article so they can be on the lookout for stuff like this in there investigations.
- treeman79 4y agoThere was actually a news article with the exact scenario. I showed it to my daughter at the counter as a way to get her to slow down and think.
- batmanthehorse 4y agoCan you post a link to the article? I’m having a hard time understanding the scam based on your comment.
- treeman79 4y ago
- granzymes 4y agoFor 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!
- hondo77 4y agoAnd yet two commissioners voted "no". Wanna guess who appointed them?
- rmatt2000 4y agoSome 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.
- stefan_ 4y agoThere 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.
- vivekd 4y agoI 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
- stefan_ 4y agoOnly 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.
- hn_throwaway_99 4y agoRelated to this, I do not understand how Green Dot is still in business. I worked for a fintech, and literally every single attempted transaction we got from a Green Dot card was fraud. We wrote special logic in the code that specifically required all Green Dot transactions to get a manual review - I can't remember if we switched this to just outright reject, because I'm not exaggerating when I say we never got a valid Green Dot transaction.
- r0m4n0 4y agoI’ve used green dot cards on a few occasions just to give it some legitimacy. 1) got it as a spot bonus at work 2) buy them with cash to then purchase a vpn service that I use. I won’t go into other precautions I take to remain anonymous online but it’s a start haha
- formerkrogemp 4y agoI sold green dot cards at a retailer. Green dot cards exist for those who get shadow banned from cashing checks and opening bank accounts from ChexSystems. Green Dot Cards charge a monthly fee, activation fee, and fees for certain transactions last I checked. Besides their apparently non existent AML, it seems to be a lucrative niche.
- flatiron 4y agoI used to work for a utility company. Almost every fraud included walking into a Duane reed and filling a green dot card. Every time I see one I just think of all those poor people. 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.
- deleted 4y ago[deleted]
- Fargoan 4y agoI remember people used to use green dot to buy drugs on forums before silk road was around
- Aspos 4y agoThere is a reason why such kinds of fraud are practically nonexistent in some other countries but are prevalent in the US. 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.
- Schiendelman 4y agoIt’s not the regulators themselves, it’s the politicians stopping the professionals from doing their jobs.
- Aspos 4y agoRegulators are hired by and largely follow directions set by politicians, so ultimately it is the fault of politicians in any case. I trust they finally will do the right thing. After having tried everything else of course.
- damowangcy 4y agoThe problem is much complex than that. Coming up regulations and policies for the whole country isn't as simple and easy as it look. 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.
- MBCook 4y agoWhat regulations would have solved this problem? 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.
- paulpauper 4y agowhy hasn't the FTC done this with YouTube and crypto livestream scams. Most of the victims are Coinbase users (addresses that start with bc1) and thus Americans. YouTube profits from these scam videos while people lose millions.
- duskwuff 4y agoBecause crypto livestream scammers aren't a US corporation. They may not even be a single entity.
- paulpauper 4y agothey are hosted by a us corporation. the corporation has been aware of these scams for years and has refused to act beyond occasionally disabling the videos only after the scammers profit and make more videos and hack into more channels. the corporation also profits from these videos.
- hbcondo714 4y ago> Walmart acts as an agent for multiple money transfer services, including MoneyGram, Ria and Western Union This is an important distinction. The actual money transfer service is not the issue in this specific case.
- akozak 4y agoIt sort of is in the complaint. It sounds like the FTC imposed requirements on MoneyGram separately years ago, and MoneyGram tried but failed to impose those obligations on Walmart's retail locations. (It also seems that Walmart is itself a registered MSB/transmitter.)
- deleted 4y ago[deleted]
- YeBanKo 4y agoCan someone tldr how exactly consumers lost money here?
- xsmasher 4y agoFrom the lawsuit: > 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.
- rasz 4y agoScammers Wanted $3,600 - They Watch Grandma Spend It All Kitboga https://www.youtube.com/watch?v=T1f37ojXcIc https://www.youtube.com/watch?v=T1f37ojXcIc
- causality0 4y agoThis week a fast food worker was shot and killed because someone had too much mayo on their burger. You think a company is going to tell ten dollar an hour workers to piss off criminals?
- fortran77 4y agoI had to check this for myself. It's true: https://fox11online.com/news/nation-world/subway-worker-shot-dead-in-atlanta-because-she-put-too-much-mayo-on-sandwich-fast-food-georgia-killed-killing-shooting https://fox11online.com/news/nation-world/subway-worker-shot...
- KMag 4y agoAnother crazy detail of that story is that the manager returned fire at the perp.
- DangitBobby 4y agoWhat a time to be alive.
- rasz 4y agoNot the first mayo kill either https://www.nbcnews.com/news/us-news/killing-fight-mayonnaise-ends-life-sentence-iowa-man-rcna14867 https://www.nbcnews.com/news/us-news/killing-fight-mayonnais...
- AnIdiotOnTheNet 4y ago> I don't know what the world is coming to especially with our youth. They seem to be so hot headed Is kind of an ironic comment for a Fox affiliate to publish.
- sfmike 4y agoThis is the realest comment here. are you really going to ask for the donation like the manager asks to every moaning and complaining person for example? No you're going to take their money and say nothing and move along. Poliicy meeting reality.
- EVa5I7bHFq9mnYK 4y agoIt is inconceivable to ask minimum wage Walmart employees to detect fraud, detect fake IDs, and conduct suspicious activity investigations. It costs much more money to conduct those checks than $1 or so that Walmart charges for its transfers. Walmart will simply stop providing those services, which were used primarily by disadvantaged populations and immigrants.
- tallanvor 4y agoThat's on Walmart. Obviously we don't want to make things harder for already disadvantaged communities, but we simply can't let Walmart off the hook when they specifically tell their employees to complete transactions even when they suspect fraud. There are just too many stories from Walmart employees who KNEW a person was being scammed but they were required to complete the transaction.
- EVa5I7bHFq9mnYK 4y agoThey are free to warn the person getting scammed, but it's not their job to decide for a grown adult person what they should do with their money. The elderly and the gullible should have their relatives and social workers looking out for their finances, not Walmart employees. 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).
- noptd 4y ago>Obviously we don't want to make things harder for already disadvantaged communities, but we simply can't let Walmart off the hook when they specifically tell their employees to complete transactions even when they suspect fraud. 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?
- MathMonkeyMan 4y agoThis is what the FTC is for.