The Consumer Financial Protection Bureau (CFPB) has sued Walmart and Branch Messenger for forcing Walmart Spark delivery drivers to use specific deposit accounts without consent and misleading them about accessing their earnings.
Key Allegations
- Forced Accounts: Walmart and Branch opened accounts for drivers without their consent, requiring drivers to use these accounts to receive pay or face termination.
- Fees: Drivers paid over $10 million in fees to transfer earnings to their preferred accounts.
- Deception: Drivers were falsely promised “instant access” to their pay but faced delays and additional fees.
This resulted in workers paying more than $10 million in fees to transfer their earnings to an account of their choice, the watchdog agency said. The CFPB also claims Branch failed to follow legal requirements, such as investigating errors or honoring stop payment requests.
The lawsuit seeks to stop these practices, compensate affected workers, and impose penalties to support a victim relief fund.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” said CFPB Director Rohit Chopra. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
"Last-mile" deliveries
Walmart (NYSE: WMT), the multinational retail corporation headquartered in Bentonville, Arkansas, operates the Spark Driver Program, through which gig economy drivers make “last-mile” deliveries from Walmart stores nationwide.
Branch is a financial technology company that offers a deposit account at Evolve Bank & Trust that consumers access through a digital app and debit card.