CFPB Takes Legal Action Against Walmart and Financial Tech Company Regarding Delivery Driver Accounts

December 23, 2024 TruthUSA

According to the lawsuit, over 1 million drivers were enrolled in accounts they never authorized, which Branch describes as a ‘clear overreach.’

Federal authorities have initiated a lawsuit against Walmart and the financial technology firm Branch, alleging that more than one million delivery drivers were enrolled in accounts without their consent.

The Consumer Financial Protection Bureau (CFPB) disclosed on December 23 that it is taking legal action against Walmart and Branch for purportedly breaching federal consumer financial protection regulations.

As stated in the lawsuit, filed in the U.S. District Court for the District of Minnesota, Walmart allegedly set up deposit accounts for its Spark Driver program via Branch without informing or obtaining the explicit consent of the drivers, mandating that they accept these accounts as a condition of their employment.

Walmart runs the Spark Driver Program to manage last-mile deliveries from its stores, providing deliveries or shopping orders to drivers who, in turn, deliver them to customers, akin to services like DoorDash and Instacart.

The CFPB contends that these actions constituted deceptive practices that incurred significant junk fees for the drivers.

The lawsuit asserts that the defendants compelled delivery drivers to receive payments solely through Branch accounts, withholding their wages and threatening termination for non-compliance.

Regulators allege that in certain instances, Walmart and Branch misrepresented the speed at which drivers could access their earnings, ultimately imposing additional charges when they sought to transfer funds to their personal accounts.

The CFPB’s complaint further alleges that Branch has engaged in a wider range of infractions, including failing to adequately investigate errors, denying stop-payment requests, and requiring drivers to relinquish certain legal rights.

“Walmart made false promises, illegally opened accounts, and took advantage of over a million delivery drivers,” stated CFPB Director Rohit Chopra in a press release, noting that the alleged actions of the companies breached federal laws intended to safeguard workers and consumers.

“Companies cannot compel workers to receive payments through accounts that diminish their earnings with junk fees.”

The CFPB aims to halt the contested practices, recover funds for those affected, and impose penalties on the companies involved.

Walmart did not provide a response to The Epoch Times’ request for comment regarding the lawsuit on Monday.

A representative from Branch sent an email to The Epoch Times, staunchly defending the company’s practices.

“Branch strongly disagrees with the lawsuit filed today by the CFPB, as it misrepresents the law and the facts and includes deliberate omissions to conceal the Bureau’s evident overreach,” the statement read.

“Branch has offered Walmart and their driver partners essential services that enable quick and easy access to funds through their business accounts— a critical detail that the Bureau’s press release neglects to mention. Despite the company’s full cooperation with the investigation, the CFPB declined to engage with Branch meaningfully about this issue, opting instead to hastily file a lawsuit.”

Branch maintains that the CFPB’s litigation is “not about the law or the protection of workers but is instead focused on the media attention drawn by a lawsuit involving one of the largest retailers in the world.”

“Branch supports its model and services and will vigorously defend against this action,” the statement continued. “We remain committed to aiding companies in expediting payments and empowering American workers to achieve financial growth.”

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