US sues Walmart, Branch Messenger over driver payment issues
The United States Consumer Financial Protection Bureau filed a complaint against Walmart and Branch Messenger, accusing them of forcing delivery drivers to use poorly managed and costly deposit accounts to receive payment.
The complaint expresses concerns about the financial products' management and the cost burden on drivers.
"Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers," said CFPB Director Rohit Chopra in a press release on Monday. "Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees."
The lawsuit claims that since 2021, Walmart and Branch have opened Branch accounts for over a million Spark Driver Program drivers without their permission, depositing their pay into these accounts.
This action allegedly forced drivers to make payments through these accounts, which were said to be poorly managed and costly.
The lawsuit also claims that Walmart and Branch coerced drivers into using Branch accounts by threatening termination if they refused. Additionally, drivers were allegedly misled about when they could access their earnings, resulting in delays and fees if they attempted to transfer funds to other accounts. These practices are said to have resulted in more than $10 million in "junk fees" for drivers.
The CFPB also accused Branch of failing to investigate errors, make required disclosures, keep accurate records, and honour stop payment requests.
Branch also allegedly forced customers to waive their legal rights.
This lawsuit is part of the CFPB's larger crackdown on companies that mishandle consumer and employee financial accounts, following a previous case against Comerica Bank for illegal fees on federal benefits and prepaid debit cards.
The most recent complaint filed by the Consumer Financial Protection Bureau targets the Zelle payments network operator, as well as JPMorgan Chase, Bank of America, and Wells Fargo.
The lawsuit claims that these companies failed to properly investigate fraud complaints or compensate victims. Since Zelle's launch in 2017, customers are said to have lost over $870 million as a result of these issues.
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