The federal government is suing Walmart and the fintech company Branch Messenger, accusing the companies of forcing employees to use specific accounts to access their pay and of opening the accounts on the employees’ behalf.
The Consumer Financial Protection Bureau said that Walmart and Branch Messenger would only allow their Spark Drivers, who are classified as independent contractors, to use Branch accounts only to receive their pay, CNN reported. If they didn’t use the Branch platform, the drivers could be fired, the lawsuit contends.
Spark Drivers are the ones who get packages for shoppers from Walmart’s warehouses and deliver them to the buyer directly. It’s called the “last mile” delivery, CNBC reported.
Drivers had to pay a combined $10 million in what the CFPB called “junk fees” and that getting their pay was a “complex process” that could be delayed for weeks, despite being told that they would be able to access their money immediately.
The CFPB said the practice dated back to 2021, CNBC reported.
Walmart denied the allegations, CNN reported.
“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 to CNN. “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.”
The CFPB also accused Branch Messenger of misleading advertising and failure to investigate and resolve errors.
Branch Messenger also released a statement which read, “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,” CNN reported.
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