CHICAGO—Walmart has filed a motion to dismiss a lawsuit by the Federal Trade Commission that accuses the company of allowing its money transfer services to be used by scam artists, calling it an “egregious instance of agency overreach.”
In its lawsuit, the FTC alleged that for years, Walmart failed to properly secure the money transfer services offered at its stores, stealing “hundreds of millions of dollars” from customers. The agency said Walmart didn’t properly train its employees, failed to alert customers, and used procedures that allowed fraudsters to cash out at its stores.
The FTC had asked the court to order Walmart to return money to consumers and to impose civil penalties on the company, The Gleaner reported.
‘Legally Flawed Claims’
In a 41-page document filed in U.S. District Court for the Northern District of Illinois Eastern Division, Walmart addressed a number of what it called legally flawed claims, including that the agency lacked “constitutionally valid authority to sue for money or injunctive relief.”
It further alleged the FTC is trying to hold Walmart liable for the criminal actions of completely unrelated third-party fraudsters even as Walmart has embraced a number of steps to stop such scamming, The Gleaner stated.
Agency ‘Contorting’ Reg
Walmart further argued that the agency is trying to contort a regulation called the Telemarketing Sales Rule that was aimed to go after telemarketers and those who actively help them but that Walmart is neither. Walmart also took issue with the FTC’s claim that Walmart allegedly engaged in an “unfair” act or practice, or any ongoing or imminent misconduct under Section 5 of the FTC Act, The Gleaner said.
“To be clear, Walmart is now – and always has been – dedicated to its customers and shares the FTC’s goal of protecting customers from fraudsters,” the Walmart filing said. “But this lawsuit is an egregious instance of agency overreach.”
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