(Finance) – The Consumer Financial Protection Bureau (CFPB) of the United States has sued Walmartan American giant in large-scale retail trade, and Branch Messenger, a workforce payments company, for having forced delivery drivers to use expensive escrow accounts to get paid and for deceiving workers, the last-mile drivers in Walmart’s Spark Driver program, about how they could access their earnings.
The CFPB’s lawsuit alleges that Walmart and Branch opened Branch accounts for Spark Drivers, and Walmart then deposited the drivers’ pay into these accounts, without the drivers’ consent. Walmart told Spark Drivers that they had to use Branch to get paid and that they would fire workers who didn’t want to use these accounts. Walmart and Branch also misled workers about having same-day access to their earnings. Drivers had to go through a complex process to access their funds, and when they finally did, they faced further delays or fees if they needed to transfer the money they earned to an account of their choice. This has resulted in workers paying more than $10 million in commissions to transfer their earnings to an account of their choice.
“Walmart made false promises, opened accounts illegally, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said. they can’t force workers to get paid through accounts that drain their earnings with junk fees“.
The CFPB also alleges that Branch engaged in a series of illegal activities related to the accounts of consumers, including failing to investigate alleged errors, failing to comply with stop-payment requests, failing to keep necessary records, failing to provide certain information, and unlawfully requiring consumers to waive their rights under the law.
The CFPB argues that, for approximately two years starting in 2021, Walmart and Branch violated federal law.
Walmart and Branch Messenger have rejected the charges of the CFPB, accusing the agency of not giving them time to provide explanations and of “rushing” the filing of the lawsuit. “We look forward to vigorously defending the company before a court that, unlike the CFPB, respects due process of law,” Walmart said in a statement.