According to reports, the US Federal Trade Commission (FTC) said it has sued Walmart, saying the company did too little to prevent fraudsters from using its money transfer service to commit fraud, causing consumers to lose tens of millions of dollars each year.

Walmart Inc. provides some financial services and acts as an agent for money transfer services such as MoneyGram and Western Union.

For years, the FTC said Walmart paid money transfers even when it was suspected of fraud, while failing to take other steps to prevent consumers from being defrauded.

"Consumer Reports alleges that Walmart employees process tens of millions of dollars in fraudulently-prone transfers each year," the FTC said in its complaint filed in U.S. District Court for the Northern District of Illinois.

The indictment alleges that Walmart knew very well that fraudsters used Walmart's money transfer service to transfer cash to fraudsters in a variety of ways. Still, Walmart continues to process fraud-inspired money transfers -- funding telemarketing and other scams -- without taking steps to effectively detect and block those transfers. "

In a statement, Walmart said it would fight the lawsuit, which it said was "factually flawed and without legal merit."

The FTC said it is asking the court to order Walmart to return the lost funds to consumers and pay a civil penalty.

The committee voted 3-2 to file the lawsuit, with three Democrats on the committee in favor and two Republicans against.


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