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CNN
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The Consumer Financial Protection Bureau sued Walmart and fintech company Branch Messenger for allegedly forcing more than a million delivery workers to use expensive deposit accounts to access their paychecks, the agency announced Monday.
The companies opened deposit accounts for Walmart’s drivers with their personal information, such as Social Security numbers, without authorization, according to the agency’s complaint. Walmart’s Spark Drivers, who the company classes as independent contractors who bring packages from the company’s warehouses to customers’ doorsteps, could only have their pay deposited into the Branch accounts, the complaint says. Since 2021, Walmart told workers that they could lose their jobs for not using the accounts, according to the lawsuit.
Accessing their earnings took a “complex process” that sometimes led to “weekslong” delays, the lawsuit said, despite assurances they would have instant access to their pay.
And drivers paid a combined total of $10 million in “junk fees” to transfer those wages into other bank accounts, CFPB alleges.
“Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” CFPB Director Rohit Chopra said in a statement.
The lawsuit described the typical Spark Driver as “a woman, has children, does not have a college degree, and is low income.”
Walmart denied CFPB’s claims and said it would defend itself in court.
“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,” the company said in a statement Monday. “The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation. We look forward to vigorously defending the Company before a court that, unlike the CFPB, honors the due process of law.”
Additionally, CFPB accused Branch of misleading advertising and failure to investigate and resolve errors, among other allegations. Branch also denied the claims in the lawsuit and said it provides “quick and easy access to funds.”
“Despite the company’s extensive cooperation with its investigation, the CFPB refused to engage with Branch in any meaningful way about this matter, instead rushing to file a lawsuit,” the company said in a statement Monday, claiming that the lawsuit is more about “media attention” and “has nothing to do with the law or protecting workers.”
The lawsuit joins the growing chorus for more protections and official classifications for gig workers, who have freelance jobs through apps like Uber, Lyft and Doordash. Earlier this month, the CFPB under the Biden administration sued JPMorgan Chase, Bank of America and Wells Fargo for allegedly failing to prevent fraud on money-sending app Zelle.
President-elect Donald Trump is expected to choose a new CFPB director. It’s unclear what that means for this case, but “much will depend upon whom Trump picks as CFPB director,” Jaret Seiberg, financial services policy analyst at TD Cowen Washington Research Group, told CNN previously in an email.
CNN’s Jeanne Sahadi contributed to this report.
