cfpb charges against walmart: Walmart allegedly opened unauthorized bank accounts for more than 1 million drivers: CFPB files suit

The Consumer Protection Bureau (CFPB) has filed a lawsuit against Walmart and fintech company Branch Messenger, alleging that more than a million Walmart delivery drivers were forced to use unauthorized escrow accounts to access their earnings. According to the complaint, Walmart and Branch created these accounts using the drivers’ personal information, such as Social Security numbers, without their consent. Drivers were reportedly charged millions in fees for transferring wages to other accounts, sparking criticism of unfair labor practices and exploitation of gig workers.The CFPB alleges that starting in 2021, Walmart’s Spark Drivers, classified as independent contractors, were forced to receive their paychecks through branch escrow accounts. According to the lawsuit, the drivers were threatened with losing their jobs if they refused to comply. Access to earnings often required a “complicated process” that in some cases resulted in delays of up to weeks. In addition, drivers paid a total of $10 million to transfer funds to personal bank accounts, despite promises of “instant access.”

Read also: American Airlines is resuming flights after a nationwide shutdown on Christmas Eve

CFPB Director Rohit Chopra criticized the practice, saying, “Companies cannot force workers to be paid through bills that drain their garbage revenue.”

Walmart and Branch deny the allegations

Walmart strongly denied the CFPB’s claims, describing the lawsuit as “rushed” and “riddled with factual errors.” In its statement, Walmart argued that the CFPB did not give the company a fair chance to defend itself and vowed to “vigorously” challenge the case in court. The affiliate also denied wrongdoing, saying its services provide “quick and easy access to funds” and accused the CFPB of filing the lawsuit for media attention rather than worker protection.Read also: Christmas Eve 2024: Store hours for Costco, Walmart, Target, Lowe’s and more

The lawsuit has reignited debate over the classification and protections of gig workers, who often rely on jobs on apps like Uber, DoorDash and Lyft. The CFPB lawsuit followed similar cases during the Biden administration, including lawsuits against major banks for failing to prevent fraud in payment apps like Zelle.

frequently asked questions:

What is the lawsuit against Walmart about?
The CFPB alleges that Walmart and Branch Messenger opened unauthorized bank accounts for more than 1 million delivery drivers and forced them to use those accounts to access payroll.How has Walmart responded to the allegations?
Walmart has denied the allegations, calling the CFPB’s claims factually incorrect and exaggerated. The company said it plans to defend itself in court.