(Bloomberg) — Walmart Inc. and one of its financial technology partners allegedly opened expensive bank accounts for delivery drivers at the world’s largest retailer without their consent, a U.S. consumer protection agency said Monday.
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The Consumer Financial Protection Bureau sued Walmart and Branch Messenger Inc., claiming they required participants in the Spark Driver program to be paid through high-cost accounts or be fired.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a statement after the agency sued the two companies before the federal court in Minnesota.
A spokesperson for Branch Messenger said the company strongly disagrees with the lawsuit and that the company “stands behind its model and services and will vigorously defend this action.”
A Walmart representative said the Bentonville, Arkansas-based company would defend itself against the lawsuit, saying the complaint was riddled with factual errors and that the CFPB had not given Walmart a fair opportunity to present his case during the “rushed investigation”.
This is the latest enforcement action by the CFPB, which has picked up its pace in the final days of the Biden administration. The agency sued three of the nation’s largest banks over their handling of the Zelle fraud and this month finalized a cap on overdraft fees.
The CFPB said Walmart required delivery drivers to use Branch Messenger, a fintech that offers workers deposit accounts and debit cards through their employers. Branch Messenger partners with Evolve Bank & Trust to offer these accounts. Evolve has recently come under scrutiny for its fintech-bank partnerships due to its relationship with Synapse Financial Technologies Inc., which filed for bankruptcy earlier this year.
In addition to opening the accounts without consent, the CFPB says Walmart and Branch Messenger also falsely stated that drivers could instantly access their paychecks.
In its complaint, the agency described a complex process for drivers to access their accounts, with weeks of delays before they could access their money. Some never did, the agency said.
Among those who actually made the connection, the CFPB claimed, drivers were charged a fee equal to either 2 percent of the amount transferred or $2.99, whichever was greater, for an immediate transfer. A no-fee option was available, but it could take up to five days and few people seemed to be aware of it. In both cases, the company imposed daily and monthly limits on the amount drivers could transfer from their accounts, the CFPB said.