And Walmart is the biggest retailer in the world with
over 10,000 brick and mortar locations across 19 countries.
And a new investigation from Propublica finds that scammers have
used the company's financial services to steal more than a
billion dollars from consumers. So joining me now to
tell us more about the investigation is the national reporter
at Propublica Peter Elkin Peter. Thank you so much
for joining and just walk down what you walk through
here. What your investigation showed. Sure, very
good to be with you, Kristen. The um
our reporting showed that Walmart has unfortunately become a platform
for fraudsters to use to scam consumers, to scam
its customers and it's taken a couple of forms.
Uh It's um allowed uh it, it's, it's
been done through the financial services that are at Walmart
stores which are otherwise convenient. They're also convenient for
scammers and they use these financial services, money transfers
and gift cards um to fool customers into sending them
money. So how did Walmart respond? I'm sure
obviously, as part of your story, you did
reach out to Walmart. Sure. They, they
say that they fight hard to keep uh to protect
their customers uh that they have various systems and training
in place. Um And uh they care deeply about
this. Our reporting found that they don't do enough
that their training is inadequate, um that they have
a number of practices that have allowed fraud to take
place. The Federal trade commission has sued Walmart,
um for uh ee essentially enabling fraud by allowing fraudsters
to use its money transfer services by not, um
looking out for red flags of fraud and training employees
properly. So all this has allowed these kind of
scams to take place and people to be duped in
a terrible way. Interesting. Ok, so if
you are a customer, you use Wal Mart,
you go to Wal Mart, you're in the fabric
of Wal Mart. What should you know, to
protect yourself? Sure. Well, the heart of
all of these scams of all these frauds is terrifying
. A customer they call up, um, often
they're elderly and they make them afraid, they're afraid
that their relatives or loved ones are in jail or
facing criminal threats, uh, that they're being held
hostage, that they're being investigated by the FBI.
And then they frighten people into sending the money and
they have them go purchase Walmart gift cards or send
the money to even to another country. And then
they, uh, if in the case of gift
cards, which has been the favored method, scammers
in recent years, uh, they have them load
money onto the cards and then read them the numbers
on the back. So the scammers can then drain
the card, steal the money and can't be caught
. So I see here that according to the F
DC, which actually sue Walmart in 2022 the retailer
was responsible for over a billion dollars in fraud losses
just in the past decade. So this seems to
be as if it is something that can be sticky
for Wal Mart and its customers. Is there a
reason that you found that its costs in the company
are perhaps more vulnerable to scammers? Sure. Well
, the um the scammers have turned to Walmart as
a platform for doing this because it's convenient, um
because Walmart pays out in cash, um and,
and, and often customers can be deceived. Um
, you know, Walmart is certainly a favorite location
for shopping for elderly customers and they are in many
, many cases, the victims of these terrible scams
. So what more needs to be done? Peter
in your view, after doing this investigation and report
on Wal Mart's part to protect consumers. Sure,
Walmart certainly could do more in terms of training its
employees. Um It has really tended to blame others
for the problems saying in the case of money transfers
, for example, that it's really not their responsibility
primarily to protect customers from sending money to third parties
. Um So it could improve training significantly. We
found a lot of flaws on that front. Um
Walmart also has always wanted c its associates to move
the lines quickly and that often comes at the sacrifice
of asking questions to identify red flags and prevent people
from making transfers that are prompted by scammers. Nobody
should send money to, you know, to anybody
by gift card. That's not, it's never legitimate
to do that. No, no government official.
No law enforcement official will ask a consumer to do
that. Interesting. So a billion dollars over the
past decade, that's a number that definitely sticks out
at us. The viewer Peter, could it have
a material impact on Wal Mart's business in so far
that it would also impact the stock? Well,
it's, it's certainly a reputational issue for Walmart.
Uh, I mean, in terms of the money
, um, Walmart makes hundreds of millions of dollars
, uh, in its financial services. It's a
business that it's been seeking to expand, um,
over many years and it turned into, moved into
financial services after being rejected for actually starting its own
bank. Um, so Walmart cares deeply about this
. Um, and it certainly does pose reputational risk
for the company. Well, it's also, it's
also expensive, of course to do, you know
, extensive training and to make sure that the employees
who really know how to handle these issues remain in
place as opposed to the very high turnover that takes
place often at Walmart. It's interesting because we've seen
a lot of these e commerce giants. Right.
Amazon Walmart target in some ways, really try to
expand their business, right? Having more and more
divisions, more and more units in Walmart's case,
it seems expanding into the financial services industry, obviously
in recent years. What was behind that? And
what do you think that will bring, given this
investigation? That that's a really interesting issue. The
um financial Ser Walmart has been trying to get into
financial services for i in a big way for a
couple of decades. And as I mentioned, it
was denied four different attempts to actually buy a consumer
bank. Um There's a lot of alarm about the
idea of whether this retailer or giant retailer should be
in the banking business. Would it drive banks out
of local banks out of business? Um There was
a lot of people who were troubled by that and
, and there's a sort of fundamental issue about whether
Walmart as a primarily a retailer is properly suited to
be entering the financial services business. It's gotten into
it in a big way through unregulated non bank systems
, money transfers, check cashing and gift cards,
for example. And again, that has turned into
a platform for fraud in a bad way. Well
, beyond Wal Mart, I know that you've written
here, Peter, that Americans have been scammed out
of$27 billion since 2013. Truly mind boggling and
obviously a real problem. Why are these scams so
widespread? The short version is um because they work
. Uh The fraudsters are clever. Uh There's a
lot of money to be made. We've talked about
individual scams where um Chinese gangs, they are often
Chinese gangs um have made millions of dollars by duping
thousands of customers into sending them gift card money.
Um You know, that sort of, the bottom
line is the bottom line. They've been able to
succeed at doing it. There's a number of clever
methods. It is challenging to stop, but certainly
Wal Mart could do more to stop it. All
right, Peter Elkin, a national reporter at propublica
Peter. Thank you so much for sharing your time
. Peter, of course, gave us Wal Mart's
response to him in his investigation and Chr did reach
out to Walmart for a comment, but I haven't
yet received a response.