US sues Walmart, Branch Messenger over payment accounts for delivery drivers

The US Consumer Financial Protection Bureau (CFPB) has filed a legal action against Walmart and workforce payments company Branch Messenger. The lawsuit alleges that over a million delivery drivers were pressured into using accounts without consent, leading to over $10 million in unwarranted fees.

According to the CFPB, drivers in Walmart’s Spark Driver program were allegedly warned that they would lose their jobs if they did not accept payments through these accounts. The lawsuit claims these accounts imposed excessive fees, reducing drivers’ earnings.

The CFPB Director Rohit Chopra condemned the alleged practices, stating, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.” Both Walmart and Branch Messenger have denied the allegations. They criticised the CFPB for filing the lawsuit without giving sufficient time for explanations.

Branch Messenger stated that it would vigorously defend itself in court with supporting evidence. “We look forward to vigorously defending the company before court that, unlike the CFPB, honours the due process of law,” Walmart said in a statement.

The CFPB’s lawsuit also claims that Walmart and Branch misrepresented the accounts’ benefits to drivers. While drivers were promised instant access to their earnings, many experienced delays or were charged fees to transfer their funds to other accounts. Additionally, the Branch is accused of misleading drivers about their ability to stop payments or complete specific transfers.

This lawsuit is part of the CFPB’s recent wave of enforcement actions. The CFPB recently filed a complaint against Zelle’s payments network operator, JPMorgan Chase, Bank of America, and Wells Fargo, alleging they failed to investigate fraud complaints or reimburse victims. The lawsuit claims customers have lost over $870 million since Zelle’s 2017 launch.