U.S. Sues Walmart and Branch Messenger over Driver Payment Accounts

Walmart and Branch Messenger Face Lawsuit for Allegedly Forcing Delivery Drivers to Use Costly Deposit Accounts

The Consumer Financial Protection Bureau (CFPB) has filed a complaint against Walmart and work-scheduling platform Branch Messenger for allegedly forcing delivery drivers to use poorly managed and costly deposit accounts in order to get paid.

Allegations of Misconduct

The lawsuit alleges that, since 2021, Walmart and Branch opened Branch accounts for more than one million drivers part of the Spark Driver Program, Walmart’s platform for gig economy workers to accept and schedule "last mile" deliveries, and then deposited drivers’ pay into these accounts without their consent. The company allegedly told drivers that they would be fired if they did not want to use the Branch accounts and misled drivers about when they could access their earnings.

Consequences of Using the Accounts

When drivers did use the platform, they allegedly faced numerous delays or fees if they needed to transfer the money into a different account, which resulted in more than $10 million in "junk fees." The CFPB claims that this practice is illegal and unfair, and that it has caused significant financial harm to the drivers.

Response from Walmart and Branch

Walmart and Branch have both disputed the CFPB’s allegations. A Walmart spokesperson wrote in a statement, "The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law. The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation." A representative from Branch wrote, "Branch strongly disagrees with the lawsuit filed today by the CFPB, which misstates the law and facts, and includes intentional omissions to mask the Bureau’s clear overreach."

CFPB’s Previous Actions

This is not the first time the CFPB has taken action against companies for mishandling consumer and worker financial accounts. The bureau previously sued Comerica Bank over allegations that it failed to administer a federal benefits program and charged illegal fees on prepaid debit cards. Most recently, the CFPB filed a complaint against the operator of the Zelle payments network, as well as JPMorgan Chase, Bank of America, and Wells Fargo, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursement. The lawsuit claims that customers have lost more than $870 million since the launch of Zelle in 2017.

Conclusion

The CFPB’s lawsuit against Walmart and Branch alleges that the companies forced delivery drivers to use costly and poorly managed deposit accounts, resulting in significant financial harm. The CFPB has a history of taking action against companies that mishandle consumer and worker financial accounts. This case highlights the importance of protecting workers’ rights and ensuring that companies are held accountable for their actions.

Frequently Asked Questions

Q: What is the Consumer Financial Protection Bureau?
A: The Consumer Financial Protection Bureau is a federal agency that is responsible for protecting consumers and workers from unfair financial practices.

Q: What is the CFPB’s complaint against Walmart and Branch?
A: The CFPB alleges that Walmart and Branch forced delivery drivers to use poorly managed and costly deposit accounts in order to get paid, resulting in significant financial harm.

Q: What is the Spark Driver Program?
A: The Spark Driver Program is a platform for gig economy workers to accept and schedule "last mile" deliveries for Walmart.

Q: What is the CFPB’s history of taking action against companies?
A: The CFPB has previously taken action against companies, including Comerica Bank and the operator of the Zelle payments network, for allegedly mishandling consumer and worker financial accounts.