BENTONVILLE, Ark. (KNWA/KFTA) — Walmart and Branch Messenger are facing legal action from the Consumer Financial Protection Bureau (CFPB) for allegedly deceiving over one million delivery workers through unauthorized bank accounts. The CFPB announced this lawsuit on Monday, claiming the retail giant forced its delivery drivers to use expensive deposit accounts to gain access to their paychecks.
According to the CFPB, they opened deposit accounts for Walmart drivers without their consent, utilizing personal details such as their social security numbers. "Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers," CFPB Director Rohit Chopra stated in the release. He emphasized the violation of workers' rights by forcing them to be paid through accounts laden with excessive fees.
The lawsuit alleges this practice began back in 2021 when Walmart and Branch purportedly opened Branch Accounts for drivers participating in the Spark Driver program—their delivery platform for gig economy workers. To add to the controversy, the agency claims drivers faced termination if they opted not to use these accounts.
The CFPB's findings reveal drivers were misled about the availability of same-day access to their earnings; instead, they encountered delays and trickling access through convoluted processes. Reports show these circumstances contributed to drivers incurring over $10 million in “junk fees” needed to transfer their earnings to other financial institutions.
When drivers sought to access their hard-earned wages, they were frequently bogged down by extensive fees or forced to navigate complex requirements. For many, these hurdles were insurmountable, leading to substantial financial strain. The CFPB noted, "Drivers had to follow complex processes to access their funds, and when they did, they faced delays or fees."
The backlash ensued with Walmart vehemently denying the CFPB's charges. A spokesperson proclaimed, "The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law.” Sentencing the claims as exceedingly biased, Walmart expressed eagerness to dispute the allegations before the courts—"We look forward to vigorously defending the company before a court...that honors due process of law," they stated.
Branch Messenger similarly rebuffed the allegations, underscoring their commitment to providing Walmart and its delivery partners with swift payment services. They claimed the lawsuit misrepresents the facts and reduces their responsible practices to mere overreach.
These assertions echo through the gig economy, where workers grapple with inconsistencies around pay and benefits. Independent contractors, like those relying on the Spark Driver delivery service since its launch in 2018, often find themselves at the mercy of large corporations' policies.
The lawsuit's fallout points to not only the immediate effects on the delivery workers involved but also has potential long-term repercussions for Walmart as it navigates increased scrutiny from regulators and the public alike. By allegedly forcing drivers to engage with Branch, Walmart's actions exemplify broader concerns about corporate exploitation within the gig economy.
The CFPB has gained attention for its recent focus not only on Walmart but also for its actions against other major financial institutions, including lawsuits against Zelle, Bank of America, JPMorgan Chase, and Wells Fargo for similar reasons related to consumer protection.
Whatever the legal outcomes, this saga proves to be both cautionary and illuminating. It raises questions about corporate accountability and the welfare of gig workers who often remain overlooked. For now, the future is uncertain as those impacted await the results of this legal battle, and Walmart readies itself for what it calls unjust accusations.
