The U.S. consumer finance watchdog on Monday opened a new tab with Walmart Inc. (WMT.N) and employee payments company Branch Messenger that accounted for more than $10 million in junk fees for more than 1 million delivery drivers. accused of forcing the use of
The Consumer Financial Protection Bureau said in the lawsuit that Walmart told “last mile” drivers in its Spark Driver program that they would be fired if they did not collect their paychecks in branch accounts opened without their consent.
CFPB Director Rohit Chopra said in a statement that “companies cannot force employees to receive paychecks from accounts where their income is siphoned off through junk fees.”
Representatives for Walmart and Branch Messenger both rejected the CFPB’s motion, accusing the agency of not giving them time to explain and “rushing” to file the lawsuit.
“Unlike the CFPB, we look forward to vigorously defending the company in a court that respects due process of law,” Walmart said in a statement.
The CFPB pursues enforcement and regulatory activities in the final days of President Joe Biden’s administration, announcing Friday that JPMorgan Chase & Co. (JPM.N), Open in new tab, Bank of America (BAC.N), New Open tab, announced the lawsuit against Wells. Fargo (WFC.N) opens new tab on handling payment platform Zelle.
According to Monday’s announcement, the agency is seeking to cease the conduct in question, return funds to affected consumers, and impose fines payable to the CFPB’s Victim Relief Fund.
According to the lawsuit, Walmart and Branch did not allow drivers to receive their wages immediately, even though there were actual delays and fees to send the funds elsewhere. He claims that he incorrectly told them that he could do so. Branch also said it misled drivers about whether they could stop payments or make certain transfers.