WASHINGTON—The Consumer Financial Protection Bureau has sued Walmart and Branch Messenger for forcing delivery drivers to use costly deposit accounts to get paid and for deceiving workers— “last mile” drivers in Walmart’s Spark Driver program—about how they could access their earnings, the CFPB announced.
The CFPB’s lawsuit alleges that Walmart and Branch opened Branch accounts for Spark Drivers, and Walmart then deposited drivers’ pay into these accounts, without the drivers’ consent. Walmart told Spark Drivers that they were required to use Branch to get paid and that they would terminate workers who did not want to use these accounts. Walmart and Branch also misled workers about the availability of same-day access to their earnings. Drivers had to follow a complex process to access their funds, and when they finally did, they faced further delays or fees if they needed to transfer the money they earned into an account of their choice. This resulted in workers paying more than $10 million in fees to transfer their earnings to an account of their choice, the CFPB said.
“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.”
The CFPB also alleges that Branch engaged in a host of illegal activities related to consumer accounts, including failing to investigate alleged errors, failing to honor stop payment requests, failing to maintain necessary records, failing to provide certain disclosures, and illegally requiring consumers to waive their rights under the law.
The CFPB alleges that, for approximately two years starting in 2021, Walmart and Branch violated federal law by:
- Illegally opening accounts in order for drivers to receive pay and removing driver choice in how to receive pay: Walmart and Branch opened accounts for new drivers by using drivers’ information, including their Social Security numbers, without obtaining the drivers’ consent. Drivers’ pay was then deposited into these accounts without authorization from the drivers. Drivers could not access their earnings without agreeing to Branch’s terms and conditions. Walmart required Spark Drivers to use Branch accounts or face termination.
- Harvesting more than ten million dollars in junk fees from drivers: Spark Drivers paid more than ten million dollars in junk fees to Branch to instantly transfer their earnings to an account of their choice.
- Deceiving drivers about their access to their earnings: Walmart and Branch misrepresented to drivers that Branch Accounts would give them “instant access” to pay. “In actuality, many drivers experienced delays when accessing their wages or paid fees to transfer their money elsewhere. Branch also deceived the drivers about their ability to stop payments or make certain transfers using the accounts,” the CFPB said.
The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, to provide redress for harmed consumers, and the imposition of a civil money penalty, which would be paid into the CFPB’s victims relief fund.