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FTC Sues Walmart for Facilitating Money Transfer Fraud

ftc.gov

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Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#21

Post by formerkrogemp »

iancarroll wrote: post #11
tehwebguy wrote: post #10

Earlier quoted context omitted.

Walmart 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.

Yeah, 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, bu…

You can't do that kind of shit at retailers anymore.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#22

Post by iancarroll »

rafale wrote: post #16
iancarroll wrote: post #11

Earlier quoted context omitted.

Yeah, 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, bu…

Is manufactured spending legal? It sounds like abusing an electronic and wire system.

Sounds 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).

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#23

Post by [deleted] »

granzymes wrote: post #13

For 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!

[deleted]

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#24

Post by formerkrogemp »

hn_throwaway_99 wrote: post #18

Related 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 val…

I 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.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#25

Post by iancarroll »

formerkrogemp wrote: post #21
iancarroll wrote: post #11

Earlier quoted context omitted.

Yeah, 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, bu…

You can't do that kind of shit at retailers anymore.

You can definitely still do it. I would say it is a bit less popular now though as the pandemic slowed travel, and credit card issuers have gotten used to churning and managing breakage/risks.

Chase still offers big incentives on office supply stores, so that's probably the main driver of MS right now aside from sign-up bonuses. Staples quite frequently offers $0 fees on their gift cards to encourage this.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#26

Post by formerkrogemp »

treeman79 wrote: post #4

Daughter 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 mo…

I've seen more of these sorts of scams working in my former retail employer than I have in accounting so far.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#27

Post by rmatt2000 »

hondo77 wrote: post #19
granzymes wrote: post #13

For 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!

And yet two commissioners voted "no". Wanna guess who appointed them?

Some 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.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#28

Post by batmanthehorse »

treeman79 wrote: post #9
PeopleB4Cars wrote: post #8

Earlier quoted context omitted.

This 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.

There 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.

Can you post a link to the article? I’m having a hard time understanding the scam based on your comment.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#29

Post by Aspos »

There 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.

Re: FTC Sues Walmart for Facilitating Money Transfer Fraud

#30

Post by treeman79 »

krustyburger wrote: post #14
treeman79 wrote: post #4

Daughter 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 mo…

So she still took thousands in cash out the door with her? It sounds like she went right back to work and put it back, but if anyone found out she had taken that money off the property, I doubt she would keep her job. I would recommend not sharing this story with anyone else.

She immediately called her boss.

She didn’t get fired. Boss was initially sympathetic. But she lost her promotion. Then had hours cut. So she had to leave.

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