A U.S. District Judge, Manish Shah, has dismissed a significant claim in a lawsuit by the Federal Trade Commission (FTC) against Walmart (NYSE:WMT).

The lawsuit had accused Walmart of ignoring fraudulent activities perpetrated through its money transfer services, allegedly costing consumers hundreds of millions of dollars.

The dismissed claim centered on alleged violations of the federal Telemarketing Sales Rule, which prohibits deceptive practices in telemarketing and bans the use of money transfers for payments in telemarketing sales.

Judge Shah ruled that the FTC failed to provide sufficient details on how Walmart or its employees could have recognized and prevented these fraudulent activities.

This ruling follows a previous dismissal of the same claim in March 2023, which the FTC attempted to revive with additional details in its amended complaint.

The recent dismissal, made with prejudice, prevents the FTC from filing the claim again.