Walmart, Cash App Do Little to Plug ‘Obvious Holes’ In Fraud-Prevention Efforts, Lawsuit Alleges

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A proposed class action alleges that Walmart and Cash App have known for years that their financial services are a preferred tool for scammers yet have ignored the “obvious holes” in their anti-fraud measures while “readily [facilitating]” fraudulent transfers. 

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The 56-page complaint says that victims of fraudulent Walmart and Cash App money transfers, often “the elderly and most vulnerable in our society,” have no real mechanism by which to secure a refund, while the mega-retailer and Cash App operator Block profit from every transaction. As the suit tells it, scammers regularly steer victims to Walmart to carry out scams the retailer is familiar with, while Cash App does little to keep scammers off its platform. 

“Cash App [does not] require that Walmart or its other partner retail stores verify IDs against Cash App accounts before making cash deposits, thereby allowing victims to deposit cash into scammers’ accounts with zero backstop,” the case claims.

The suit alleges that although a Cash App user should only be allowed to deposit paper money into their own account, the app is set up to allow anyone with a Cash App account to simply send a screenshot of a barcode to a non-Cash App user and direct them to deposit money into the associated account. 

The plaintiff, a 73-year-old California resident, contends that Cash App thereby facilitates fraudulent transfers while leaving non-tech-savvy victims especially vulnerable to scams. 

“Plaintiff was victimized by a caller who identified himself as a police officer,” the case reads. “The caller directed Plaintiff to make a series of deposits into Cash App accounts using barcodes purportedly associated with a bond account belonging to a court. Plaintiff did not know, and Walmart did not inform her, that there were Cash App barcodes.” 

Per the suit, the scammer directed the plaintiff to Walmart stores in Southern California, where the retailer “readily facilitated the transfers without question.”

“Among other issues, Walmart did not raise any red flags when Plaintiff, who had never used Walmart’s services, first attempted to deposit $10,000 onto a Cash App barcode. Nor did Walmart notify her that a Cash App paper money deposit is not intended for money transfers. Instead, Walmart allowed Plaintiff to transfer $4,000 in less than 24-hours.” 

The case charges that Cash App has no protocol in place to link an ID to a Cash App account, which allows scammers to take full advantage of cash deposits onto Cash App barcodes, as happened with the plaintiff.

In the end, the lawsuit says, the plaintiff was scammed out of thousands of dollars and never recovered the lost funds. 

The suit contends that although Walmart and Cash App are well aware of the prevalence of “grandparent” scams and other types of mass marketing frauds, neither the retailer nor the app has adopted adequate policies and procedures to detect and prevent fraudulent transfers. 

The lawsuit looks to cover all persons who incurred unreimbursed losses from January 1, 2021 to the present as a result of a fraudulent money transfer initiated at or through a Walmart location in the United States. The case also looks to represent all persons nationwide who incurred unreimbursed losses from January 1, 2021 through the present as a result of making a paper money deposit into a Cash App account other than their own Cash App account. 

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