from the maybe-the-problem-is-deeper-than-crypto dept
There’s no denying that the cryptocurrency world is chock full of scammers, Ponzi schemes, and sketchy sketchy offerings. But, the prevalence of such things in that world has lead some to argue that if cryptocurrencies were banned, we’d likely have less scams and fraud online. I’ve yet to see any data to support that — because it sure looks like scammers are willing to use any and all options to move money around.
Case in point: last month the FTC sued Walmart, claiming that the company didn’t just turn a blind eye to fraud, but actively seemed to encourage it.
Walmart’s practice of turning a blind eye to fraud had grave consequences for consumers, according to the complaint. The complaint cites numerous instances in which law enforcement investigations found that scammers relied on Walmart money transfers as a primary way to receive payments, including in telemarketing schemes like IRS impersonation schemes, relative-in-need “grandparent” scams, sweepstakes scams, and others. Based on information from fraud databases maintained by MoneyGram, Western Union, and Ria, from 2013 to 2018 more than $197 million in payments that were the subject of fraud complaints were sent or received at Walmart, with more than $1.3 billion in related payments also possibly connected to the fraud.
And, sure cryptocurrencies may offer some advantages for scamming, but can your cryptocurrency do this?
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.” Walmart did not begin training employees to deny fraudulent payouts until at least May 2017, but even then it provided this training only to employees at a limited number of locations.
If you suspect fraud, complete the transaction. The company literally told its employees that even when they suspect fraud, to just complete the transaction.
And it didn’t even train employees about how to deny fraudulent payouts until 2017.
The complaint notes that the company didn’t even have an anti-fraud program until 2014.
Again, this isn’t condoning either Walmart’s behavior or cryptocurrency scams, but I do find it fascinating that Walmart was doing so little to deal with fraud and scams in its money transfer service just as everyone was insisting that it was cryptocurrency making all that fraud possible.
And, no, there is no way that in 2014 or 2017 Walmart didn’t know that fraud was a serious issue. Anyone doing anything with money knows the risks and concerns about fraud. Companies that focus on payments from Paypal, to Stripe, to Block, to Apple and Google have teams working on this stuff constantly, trying to minimize fraud. Not that they always succeed, but they at least are working on it.
And Walmart, one of the largest companies in the world just went with “if you suspect fraud, complete the transaction.”