The United States is suing Walmart and Branch Messenger for overpaying delivery couriers.
Walmart and the work-scheduling app Branch Messenger were the targets of a complaint from the Consumer Financial Protection Bureau on Monday for allegedly pressuring delivery drivers to utilize expensive and poorly maintained deposit accounts in order to get payment.
“Walmart exploited over a million delivery drivers opened accounts illegally, and made false promises,” CFPB Director Rohit Chopra stated in a news release. “Employers cannot compel employees to use accounts that deplete their income with unnecessary fees.”
According to the lawsuit, since 2021, Walmart and Branch have created Branch accounts for over a million drivers who are a part of the Spark Driver Program, which is Walmart‘s platform for gig economy workers to accept and schedule “last mile” deliveries. The lawsuit claims that these accounts were then used to deposit drivers’ pay without the drivers’ consent.
The firm allegedly misled drivers about when they could access their profits and threatened to terminate them if they did not use the Branch accounts. More than $10 million in “junk fees” were allegedly incurred by drivers who used the site, who allegedly encountered multiple delays or surcharges if they attempted to move the funds into another account.
Walmart denied the accusations made by the agency.
A Walmart representative told CNBC that the CFPB’s hastily filed case was “filled with factual errors, exaggerations, and blatant misstatements of settled principles of law.” In their hasty probe, the CFPB never gave Walmart a fair chance to make its case.
Additionally, the CFPB accused the Branch of neglecting to look into reported problems, provide required disclosures, keep records, follow through on stop payment requests, and unlawfully require consumers to renounce their legal rights.
A Branch spokeswoman told CNBC that the agency “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.”
The complaint is the most recent in a long line of lawsuits the CFPB has taken against businesses that mismanage the financial accounts of workers and consumers. Comerica Bank was previously sued by the bureau for allegedly charging unlawful fees on prepaid debit cards and neglecting to manage a government benefits program.
In its most recent complaint, the CFPB accused JPMorgan Chase, Bank of America, Wells Fargo, and the operator of the Zelle payments network of failing to adequately investigate fraud accusations or provide compensation to victims. Customers have allegedly lost over $870 million since Zelle’s 2017 launch, according to the lawsuit.