Walmart hits back at FTC’s money-lending lawsuit, calls it ‘egregious’ government overreach

At a time when so many government agencies are being weaponized to attack political enemies, it might be that the Federal Trade Commission should be added to the list.

In a case that some experts say is likely to reach the Supreme Court, Walmart is fighting back against the Federal Trade Commission in a court filing on Monday, saying the agency has engaged in “egregious overreach” in its lawsuit addressing money-lending fraud.

The FTC alleges that Walmart’s MoneyGram service has been defrauded by scammers, with terrible consequences to its customers.

(Video: 5News/YouTube)

In a corporate statement, Walmart said:

The FTC’s lawsuit is an egregious instance of agency overreach.” The statement went on, “The FTC is trying to hold Walmart liable for the criminal actions of completely unrelated third-party fraudsters, in spite of Walmart’s extensive efforts to prevent those very fraudsters from defrauding our customers, and despite the FTC’s lack of constitutional or statutory authority to bring the lawsuit. Walmart is now—and always has been—dedicated to its customers and shares the FTC’s goal of protecting customers from fraudsters.


Due to Walmart’s extensive efforts to curb fraud, well beyond measures taken by other financial institutions, the company claims that “out of nearly 200 million money-transfer transactions processed at U.S. Walmart stores between 2015 and 2020, only a tiny fraction—less than 0.08%—were even reportedly the product of fraud…”

Lina Khan, appointed by President Biden to head the FTC, has been scrutinized recently for her overactive regulatory ambitions.

“The FTC has been flirting with constitutional overreach for several years and it has hit turbo boost for the past two years,” a former Justice Department official told Fox News Digital. “They could well be reined in by the Supreme Court later this year in the Axon case, especially if the Court is wise enough to expand the issues before it to the broader issue of the FTC’s constitutionality.”

Addressing the lawsuit, the Director of the FTC’s Bureau of Consumer Protection, Samuel Levine, said, “While scammers used its money transfer services to make off with cash, Walmart looked the other way and pocketed millions in fees… Consumers have lost hundreds of millions, and the Commission is holding Walmart accountable for letting fraudsters fleece its customers.”

Investigations show that at least $197 million in payments has been flagged as fraudulent, during a five-year period. The total could be more than $1 billion.

In its brief responding to the lawsuit, Walmart suggests that the case should be dismissed:

“The FTC has no authority to act as a freewheeling compliance auditor or inspector general, ‘micromanaging’ the details of Walmart’s anti-fraud program ‘in accordance with [its] wishes’. Rather, the FTC’s authority is limited by the Constitution, by the FTC Act, and by its own regulations. None of those sources supports the FTC’s claims. The case should be dismissed.”

The Federal Trade Commission filed its lawsuit against Walmart in June, claiming the corporation has been exposing its own customers to the effects of MoneyGram scammers. Based on investigations by law enforcement, the FTC’s filing alleges that perpetrators used various scamming techniques, posing as a needy relative, a sweepstakes official, or an IRS agent, utilizing Walmart’s MoneyGram service to cash in.

Challenges for the FTC include the fact that the Justice Department has not joined forces with them in this case. Also, Walmart claims that two of the FTC’s commissioners have dissented in the matter. “The skepticism about the FTC’s case is well-founded,” said a company official.

Law professor, James Cooper, told Fox News that there are several lower court cases processing other overreach cases against the FTC. One such case, Axon v. FTC, has already reached the Supreme Court. More about this case can be learned at Axon’s website.


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