FTC ‘Plausibly’ Alleges Walmart Violated TSR, Says Agency's Opposition
The FTC brought its action against Walmart to address the retailer’s “years-long refusal” to adequately secure its money transfer services, resulting in millions of dollars in consumer losses from illegal telemarketing and fraud-induced money transfers, said the agency’s memorandum Friday…
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(docket 1:22-cv-03372) in U.S. District Court for Northern Illinois in Chicago in opposition to Walmart’s Aug. 11 motion to dismiss the FTC’s June 30 first amended complaint (see 2308140007). On the FTC’s original claim that Walmart violated the Telemarketing Sales Rule, the court said the FTC needed to provide more detail about the underlying TSR violations and Walmart’s “knowledge or conscious avoidance of those violations,” it said. Heeding the court’s directive, the FTC filed an amended complaint “that does exactly that,” it said. The amended complaint “describes the red flags and suspicious characteristics that clearly distinguish those categories of illegal transactions from routine money transfers,” it said. The amended complaint also provides additional details about Walmart’s failure “for years to do anything to attempt to comply with the TSR’s ban on cash-to-cash money transfers in telemarketing transactions,” it said. That ban “applies to all telemarketing transactions -- not just those involving fraud,” it said. Walmart again moved to dismiss the FTC’s TSR claims, arguing the amended complaint’s allegations “still are not enough,” it said. “It attempts to raise the pleading bar even higher, nitpicking about a variety of purported deficiencies, and essentially demanding the FTC prove its claims at the pleading stage,” it said. The court should reject each of Walmart’s arguments and rule that the commission “has plausibly alleged a series of assisting and facilitating claims under the TSR,” it said.