US Sues Walmart, Branch Messenger Over Driver Payment Accounts

The Consumer Financial Protection Bureau filed a complaint on Monday Walmart and work scheduling platform Branch Messenger for allegedly forcing delivery drivers to use poorly managed and expensive escrow accounts to get paid.

“Walmart made false promises, illegally opened accounts and exploited more than one million delivery drivers,” CFPB Director Rohit Chopra said in a press release. “Companies cannot force workers to be paid through accounts that drain their earnings with junk fees.”

The lawsuit alleges that since 2021, Walmart and Branch opened branch accounts for more than one million drivers, part of the Spark Driver Program, Walmart’s platform for gig economy workers to accept and schedule “last mile” deliveries, and then deposited drivers’ wages into those accounts without their consent.

The company allegedly told drivers they would be fired if they did not want to use the branch accounts and misled drivers about when they could access their earnings. When drivers used the platform, they reportedly faced numerous delays or fees if they had to transfer the money to another account, resulting in more than $10 million in “junk fees.”

Walmart disputed the agency’s claims.

“The CFPB’s hasty lawsuit is riddled with factual errors and contains exaggerations and flagrant misstatements of settled legal principles,” a Walmart spokesperson wrote in a statement to CNBC. “The CFPB never gave Walmart a reasonable opportunity to present its case during their expedited investigation.”

The CFPB also accused Branch of failing to investigate alleged errors, failing to provide certain information, failing to maintain records, failing to follow up on stop payment requests and unlawfully requiring consumers to waive their rights under the law.

“Branch strongly disagrees with the lawsuit filed today by the CFPB, which misrepresents the law and the facts and includes deliberate omissions to mask the Bureau’s clear abuses,” a Branch representative wrote in a statement to CNBC.

The lawsuit is the latest in a series of actions the CFPB has taken against companies for mishandling consumer and worker financial accounts. The agency previously sued Comerica Bank over allegations it failed to administer a federal benefits program and charged illegal fees on prepaid debit cards.

Most recently, the CFPB filed a complaint against the operator of the Zelle payment network, as well as JPMorgan Chase, Bank of America and Wells Fargo, alleging that the firms failed to properly investigate fraud complaints or provide compensation to victims. The lawsuit alleges that customers have lost more than $870 million since the launch of Zelle in 2017.