“Walmart and Branch opened accounts for new drivers by using drivers’ information, including their Social Security numbers, without obtaining the drivers’ consent. Drivers’ pay was then deposited into these accounts without authorization from the drivers. Drivers could not access their earnings without agreeing to Branch’s terms and conditions,” the CFPB said in a statement. “Walmart required Spark Drivers to use Branch accounts or face termination.”
The federal Consumer Financial Protection Bureau has filed a lawsuit against Walmart, claiming that the company deceived more than a million delivery drivers by creating deposit accounts in their names without first seeking their consent.
According to National Public Radio, the CFPB asserts that Walmart’s practices have cost its drivers more than $10 million in fees since 2021. In response, the company says that the Bureau’s complaint is riddled with factual errors.
Attorneys for the agency claim that Walmart told its drivers, who deliver shipments directly to customers’ homes, that they would lose their jobs if they refused to use “Branch” accounts to receive their pay.
“Thousands of drivers had their wages deposited into a Branch account before ever agreeing to terms and conditions,” the CFPB’s lawsuit alleges.
“Walmart and Branch opened accounts for new drivers by using drivers’ information, including their Social Security numbers, without obtaining the drivers’ consent. Drivers’ pay was then deposited into these accounts without authorization from the drivers. Drivers could not access their earnings without agreeing to Branch’s terms and conditions,” the CFPB said in a statement. “Walmart required Spark Drivers to use Branch accounts or face termination.”
Drivers who did not want to use Branch, or who could not figure out how to access their Branch accounts, would not only lose their jobs but, in some cases, the wages that had already been deposited into their accounts, too.
The lawsuit also asserts that, while Walmart told its drivers that they could access their earnings instantly through Branch, configuring deposits was often a time-consuming and complex process.
“Walmart and Branch misrepresented to drivers that Branch Accounts would give them “instant access” to pay. In actuality, many drivers experienced delays when accessing their wages or paid fees to transfer their money elsewhere,” the CFPB said in a press release. “Branch also deceived the drivers about their ability to stop payments or make certain transfers using the accounts.”
Walmart, for its part, claims that the Bureau never gave the company a “fair opportunity” to respond to allegations during the CFPB’s initial investigation.
“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misrepresentations of settled principles of law,” Walmart said in a statement.
The company said that it will defend itself “before a court that, unlike the CFPB, honors the due process of law.”
National Public Radio notes that the CFPB announced its lawsuit against Walmart days after filing claims against Zelle, Bank of America, JPMorgan Chase, and Wells Fargo for broadly “failing to protect [Zelle] consumers from widespread fraud.”
Sources
Walmart illegally opened costly deposit accounts for one million delivery drivers, lawsuit claims
Walmart illegally opened delivery drivers’ deposit accounts, U.S. says
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