The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and the payroll service provider Branch Messenger, accusing them of engaging in illegal payment practices affecting gig workers.
According to the CFPB, Walmart allegedly opened direct deposit accounts for Spark delivery drivers without obtaining their consent, using their Social Security numbers. These accounts reportedly came with high fees, charging either 2% of the transaction amount or $2.99 per transaction, whichever was greater. The bureau also claims Walmart failed to deliver on promises of same-day payments for drivers, which were supposed to begin in July 2021.
The CFPB’s complaint outlines a series of alleged violations of the Consumer Financial Protection Act of 2010. For about two years, starting in June 2021, Walmart and Branch Messenger are accused of engaging in unfair, abusive, and deceptive practices. This includes compelling Spark delivery drivers to accept their compensation through Branch accounts, creating these accounts without drivers’ informed consent, and, in some cases, doing so entirely without authorization. Additionally, Walmart is accused of making misleading statements to workers about Branch accounts and the services they provide.
CFPB Director Rohit Chopra strongly condemned the actions, stating, “Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers.” He emphasized that companies cannot require workers to be paid through accounts that impose excessive fees, effectively reducing their earnings. The lawsuit has been filed in the U.S. District Court for the District of Minnesota.
Complaints about Walmart’s mandatory Branch Messenger accounts have been circulating among Spark delivery workers for years. Drivers have expressed frustration over being forced to use these accounts, with no option to direct their payments to a preferred bank or credit union. Allegedly, Walmart threatened termination for drivers who refused to accept the Branch accounts, further pressuring workers to comply with the payment system.
This lawsuit brings attention to the broader issue of payment practices for gig workers, who often lack the protections and flexibility available to traditional employees. The CFPB’s case against Walmart and Branch Messenger underscores the growing scrutiny of how corporations manage compensation for gig economy workers and whether those practices align with consumer protection laws.
As the legal proceedings move forward, the case could have significant implications for both Walmart and other companies operating in the gig economy. It raises questions about the balance of power between large corporations and their workforce, particularly in industries where gig workers rely heavily on fair and transparent payment systems.