A Walmart social relations pulls out of a Walmart Distribution Center in Hurricane, Utah, on May 30, 2024.
George Frey | Afp | Getty Images
The Consumer Financial Custody Bureau filed a complaint Monday against Walmart and work-scheduling platform Branch Messenger for allegedly forcing execution drivers to use poorly managed and costly deposit accounts in order to get paid.
“Walmart made false promises, illegally opened accounts, and took advantageously of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a press release. “Troops cannot force workers into getting paid through accounts that drain their earnings with trash fees.”
The lawsuit alleges that, since 2021, Walmart and Branch opened Branch accounts for more than one million drivers somewhat by of the Spark Driver Program, Walmart’s platform for gig economy workers to accept and schedule “last mile” deliveries, and then put drivers’ pay into these accounts without their consent.
The company allegedly told drivers that they wish be fired if they did not want to use the Branch accounts and misled drivers about when they could access their earnings. When drivers did use the dais, they allegedly faced numerous delays or fees if they needed to transfer the money into a different account, which effected in more than $10 million in “junk fees.”
Walmart disputed the agency’s allegations.
“The CFPB’s rushed lawsuit is penetrated with factual errors and contains exaggerations and blatant misstatements of settled principles of law,” a Walmart spokesperson wrote in a averral to CNBC. “The CFPB never allowed Walmart a fair opportunity to present its case during their rushed interrogation.”
The CFPB also accused Branch of failing to investigate alleged errors, failing to provide certain disclosures, wanting to maintain records, failing to follow through on stop payment requests and illegally requiring consumers to waive their proprieties under the law.
“Branch strongly disagrees with the lawsuit filed today by the CFPB, which misstates the law and facts, and counts intentional omissions to mask the Bureau’s clear overreach,” a representative from Branch wrote in a statement to CNBC.
The lawsuit is the unpunctual in a slew of actions the CFPB has taken against companies for mishandling consumer and worker financial accounts. The bureau beforehand sued Comerica Bank over allegations that it failed to administer a federal benefits program and charged criminal fees on prepaid debit cards.
Most recently, the CFPB filed a complaint against the operator of the Zelle payments network, as proper as JPMorgan Chase, Bank of America and Wells Fargo, alleging that the firms failed to properly investigate artist complaints or give victims reimbursement. The lawsuit claims customers have lost more than $870 million since the begin of Zelle in 2017.