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The Consumer Financial Protection Bureau is suing Walmart and a finance company, arguing they forced delivery drivers to fork over junk fees for “costly” deposit accounts and used their personal information without their consent.
The federal agency filed its lawsuit against the retail company and Branch Messenger, a financial technology company, on December 23. The lawsuit argues Walmart forced “workers into getting paid through accounts that drain their earnings with junk fees” through Branch for two years, beginning in 2021.
The agency says the two companies “harvested more than $10 million in junk fees” through Walmart’s Spark Driver program — which allows people to sign up and deliver Walmart orders through an app.
The agency argues Walmart told drivers they must use Branch Accounts — which it labeled a “costly and risky product” — or lose their jobs.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a statement.
The agency further argued that Walmart and Branch “opened accounts for new drivers by using drivers’ information, including their Social Security numbers, without obtaining the drivers’ consent.”
The two companies also deceived workers about when they would get their funds, the lawsuit argues, promising instant access to pay even though many employees experienced delays or paid fees to transfer their funds to other accounts.
A Walmart spokesperson said the lawsuit contained several inaccuracies and accused the agency of never allowing Walmart a “fair opportunity to present its case.”
“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,” the spokesperson told The Independent in a statement.
“We look forward to vigorously defending the Company before a court that, unlike the CFPB, honors the due process of law,” the spokesperson added.
Branch cooperated with the investigation “strongly disagrees” with the allegations against them, a spokesperson said in a statement to The Independent.
“Branch strongly disagrees with the lawsuit filed by the CFPB, which misstates the law and facts, and includes intentional omissions to mask the Bureau’s clear overreach,” the spokesperson said. “Branch has provided Walmart and their driver partners valuable services allowing quick and easy access to funds via their business accounts—a key fact the Bureau’s press release omits.”
“Branch stands behind its model and services, and will defend this action vigorously,” the spokesperson added.
