The recent lawsuit filed by the U.S. consumer finance watchdog against Walmart and Branch Messenger has brought to light the alleged mistreatment of over a million delivery drivers. The Consumer Financial Protection Bureau (CFPB) claims that Walmart and Branch Messenger forced these drivers into using accounts that resulted in more than $10 million in excessive fees.
According to the lawsuit, Walmart reportedly informed the “last mile” drivers in its Spark Driver program that they would be terminated unless they accepted payment through Branch accounts that were opened without their consent. This coercive tactic led to drivers losing a significant portion of their earnings to unnecessary fees.
CFPB Director Rohit Chopra condemned this practice, stating, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.” The allegations made by the CFPB have been vehemently denied by representatives of Walmart and Branch Messenger. They criticized the agency for not allowing them adequate time to provide explanations and accused them of rushing to file the lawsuit.
Walmart issued a statement expressing their intention to vigorously defend the company in court, emphasizing the importance of due process. The CFPB, on the other hand, has been actively pursuing enforcement and regulatory actions in the final days of President Joe Biden’s administration. In addition to the lawsuit against Walmart and Branch Messenger, the agency recently filed a lawsuit against major banks like JPMorgan Chase, Bank of America, and Wells Fargo over their handling of the payments platform Zelle.
The CFPB aims to put an end to the alleged misconduct, refund affected consumers, and impose fines that will contribute to the CFPB’s victim relief fund. The lawsuit specifically accuses Walmart and Branch Messenger of misleading drivers by promising instant access to their wages when, in reality, delays and fees hindered their ability to transfer funds. Branch Messenger is also accused of deceiving drivers about their control over payments and transfers.
Overall, the lawsuit sheds light on the importance of protecting workers from exploitative practices and holding companies accountable for their actions. As the legal proceedings unfold, the outcome of this case will have significant implications for the gig economy and the rights of delivery drivers across the country.
