Walmart is facing a lawsuit from the Consumer Financial Protection Bureau (CFPB) for allegedly coercing its delivery drivers into using bank accounts with high fees to access their paychecks.
The lawsuit, filed against both Walmart and the financial services company Branch, accuses the retailer of forcing drivers participating in the Walmart Spark Driver program to use Branch accounts, which came with costly service charges.
According to the CFPB, drivers were threatened with termination if they refused to comply with the use of Branch accounts. These accounts imposed fees for basic transactions, such as transferring paychecks into drivers’ own bank accounts.
“Walmart made false promises, illegally opened accounts and took advantage of more than a million delivery drivers,” said CFPB Director Rohit Chopra. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
In response, Walmart issued a statement rejecting the CFPB’s claims, accusing the agency of making factual errors and exaggerating the situation.
“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,
The CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation,” Walmart said in a statement to CBS MoneyWatch.
Branch, the financial services provider linked to the case, also responded, defending the arrangement with Walmart and its drivers.
The company stated that the lawsuit omitted key facts, including the ease of access to funds provided by its services.
“Branch has provided Walmart and their driver partners valuable services allowing quick and easy access to funds via their business accounts—a key fact the bureau’s press release omits,” Branch said.
The lawsuit claims that Walmart has been forcing drivers to use Branch accounts since 2021, opening accounts without their consent by using personal information such as Social Security numbers. Drivers who refused to use Branch were reportedly at risk of being terminated.
The total cost to drivers has been significant, with an estimated $10 million paid in servicing fees—referred to as “junk fees”—since 2021.
“Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” said CFPB Director Rohit Chopra.
