Fraudology Podcast with Karisse Hendrick

The Dark Side of Marketplaces: Walmart’s Fraud Problem Exposed

Sep 30, 2025
Discover the dark realities of online marketplaces, particularly Walmart's, where rapid growth led to lax seller vetting. The discussion dives into serious issues like identity theft and counterfeit goods, backed by a striking CNBC investigation. Learn how Walmart's attempts to attract sellers resulted in numerous fraud cases. Hear about the contrasting seller vetting strategies of Walmart versus Amazon and Target. Plus, explore the regulatory changes on the horizon that aim to safeguard consumers and the implications for e-commerce.
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INSIGHT

Growth Versus Safety Tradeoff

  • Walmart rapidly grew its third-party marketplace to compete with Amazon and loosened seller vetting policies.
  • That growth strategy created systemic risks, including counterfeit and identity-theft seller accounts.
ADVICE

Require Strong Seller KYC

  • Perform KYC with identity-document checks and liveness verification for marketplace sellers.
  • Use layered verification to ensure sellers are real businesses and reduce counterfeit and money-laundering risk.
ANECDOTE

Customer Bought Counterfeit Supplements

  • A shopper bought deeply discounted Nureva supplements that arrived with misspellings and different packaging.
  • CNBC confirmed the supplements were counterfeit and the seller had impersonated another business.
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