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ProPublica investigates fraud funneled through Walmart gift cards

According to ProPublica's investigation, Americans have lost more than $1 billion in fraud connected to Walmart gift cards.
ProPublica investigates fraud funneled through Walmart gift cards
Posted at 4:55 PM, Jan 17, 2024
and last updated 2024-01-17 18:56:48-05

new report from ProPublica shows how Walmart became a magnet for fraudsters and scammers. 

According to its investigation, Americans have lost more than $1 billion in fraud connected to Walmart gift cards. 

The scammer would lure a victim by calling them and telling them their personal information was stolen. The scammer then said they needed money to help them. They directed the victim to buy Walmart gift cards and send them pictures of the physical cards. The scammer then gave the codes for those gift cards to someone else who would buy other types of gift cards for stores like Apple. 

Since the money was transferred with gift cards, there was no way to trace it.

In a review of public records, court documents and dozens of interviews, ProPublica found Walmart has for years resisted financial regulations and inadequately trained employees to deal with financial fraud.

As a result, from 2013 to 2022 more than $1 billion in fraud losses moved through Walmart's systems.

ProPublica's Craig Silverman spoke with Scripps News about what its investigation showed.

"I started looking through court documents about cases involving fraud and involving incidents where people have been scammed through gift cards. And I kept seeing Walmart being cited again and again and again in court documents," Silverman said. "So at that point, we started looking more broadly to see what role might a retailer like Walmart be playing in this. And because Walmart is so ubiquitous in so many communities across the country, it is a place that scammers started to send people because they knew that there was probably a Walmart near their victim. And Walmart had not really invested a lot in training its employees properly to spot the signs of scams. So it ended up being exploited by these scammers for a long period of time."

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"One of the perceptions that people have is that it tends to be older Americans who are mostly victimized," Silverman said.  "And there's no question that older folks do end up falling for these. But the key distinction is that they tend to lose more money because they have more savings. They're further along in life and may be retired. And so certainly you have older folks who are being targeted. But by no means is it just one generation, one type of person being hit. Anybody is liable to be scammed. It just needs to be the right time of them getting you with the right message. They could be telling you you have a relative who's in distress. They could be telling you they're the IRS or another government body, saying you need to pay them in gift cards. Or they could say that it's an antivirus service that you need to pay. Anything that they're telling you needs to be paid in gift cards — a government service, anything like that — that is an absolute red flag and you should not do it."

"The number one thing is to understand that no law enforcement agency, government agency, or really the vast majority of businesses do not accept retailer gift cards as a form of payment," Silverman said. "So anytime somebody is on the phone, putting you in a state of urgency because you owe money, or someone is in jail and they need to pay bail and they're telling you to get them money in gift cards, that's it. You hang up. You get out of there right away because that's not legitimate."


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