The Consumer Financial Protection Bureau (CFPB) initiated legal action on Monday against Walmart and the work-scheduling platform Branch Messenger. The lawsuit accuses these entities of compelling "last mile" drivers enrolled in Walmart's Spark Driver program to utilize expensive deposit accounts to receive their wages, and of providing misleading information regarding how these drivers could access their pay.
The CFPB contends that Branch accounts were autonomously established for Spark Drivers by Walmart and Branch, without obtaining the drivers' consent. Subsequently, Walmart deposited the drivers' wages into these accounts.
According to Rohit Chopra, Director of the CFPB, "Walmart misled workers, illegally initiated accounts, and exploited over a million delivery drivers. Companies cannot obligate employees to receive payment through accounts that deplete their earnings with unnecessary fees."
Walmart purportedly informed the Spark Drivers that utilizing Branch was mandatory for receiving payments and threatened job termination for workers who opposed using these accounts.
Additionally, the lawsuit claims that both Walmart and Branch misrepresented the availability of immediate access to earnings. Drivers endured a complicated process to retrieve their funds and encountered further delays or charges when transferring their earnings to an account of their preference. Consequently, workers incurred over $10 million in fees for such transfers.
In response to these allegations, Walmart has reportedly denied the claims put forth by the CFPB.
A Walmart spokesperson expressed to CNBC, "The CFPB's hasty lawsuit contains numerous factual inaccuracies, exaggerations, and outright misrepresentations of established legal principles. The CFPB did not afford Walmart a fair chance to present its case during their expedited investigation."
