U.S. sues Walmart, Branch Messenger over payment accounts for delivery drivers

The Consumer Financial Protection Bureau filed a complaint Monday against Walmart and work-scheduling platform Branch Messenger for allegedly forcing delivery drivers to use poorly managed and costly deposit accounts in order to get paid.

“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a press release. “Companies cannot force workers into getting 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’ pay into these accounts without their consent.

The company allegedly told drivers that 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 did use the platform, they allegedly faced numerous delays or fees if they needed to transfer the money into a different account, which resulted in more than $10 million in “junk fees.”

Walmart disputed the agency’s allegations.

“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,” a Walmart spokesperson wrote in a statement to CNBC. “The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation.”

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

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

The lawsuit is the latest in a slew of actions the CFPB has taken against companies for mishandling consumer and worker financial accounts. The bureau previously sued Comerica Bank over allegations that 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 payments network, as well as JPMorgan Chase, Bank of America and Wells Fargo, alleging that the firms failed to properly investigate fraud complaints or give victims reimbursement. The lawsuit claims customers have lost more than $870 million since the launch of Zelle in 2017.