The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and Branch Messenger, alleging that they illegally opened costly deposit accounts in the names of over one million delivery drivers without their consent. According to the federal agency, these drivers collectively paid over $10 million in fees due to this practice, which it claims began in 2021.
Forced Use of Unwanted Accounts
The lawsuit asserts that Walmart and Branch Messenger forced delivery drivers to use these unauthorized accounts in order to receive their pay. Drivers were misled about how to access their earnings and were allegedly threatened with termination if they did not comply with the requirement. The process for accessing pay was described as overly complicated, and drivers faced further delays or additional fees if they attempted to transfer their earnings to another account.
As a result of these actions, the CFPB alleges that workers were subjected to more than $10 million in fees to transfer their pay to accounts they actually controlled.
Walmart Made False Promises
CFPB Director Rohit Chopra condemned the companies’ actions, saying, “Walmart made false promises, illegally opened accounts and took advantage of more than a million delivery drivers. Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
Both Walmart and Branch Messenger have vowed to vigorously defend themselves against the lawsuit. Walmart issued a statement claiming that the CFPB’s lawsuit contained “factual errors” and misrepresented 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,” the company said in an email to CBS MoneyWatch.
Alleged Violations of Federal Law by Walmart
The CFPB’s lawsuit accuses both Walmart and Branch Messenger of violating federal law over a two-year period, beginning in 2021. The two companies are accused of using drivers’ personal information, including Social Security numbers, to open accounts without consent. Drivers’ wages were then deposited into these accounts, resulting in significant fees for drivers who sought to transfer their earnings to their own accounts.
This issue is connected to Walmart’s Spark Driver Program, which allows gig economy workers to make “last-mile” deliveries from Walmart stores across the United States. Branch Messenger, a financial technology company, partners with Evolve Bank & Trust to offer the deposit accounts at the center of the dispute.
Broader Regulatory Actions
This lawsuit against Walmart and Branch Messenger is not the first action involving Evolve Bank & Trust. In May 2024, the CFPB filed a lawsuit against SoLo Funds, another Evolve partner, accusing it of deceiving borrowers about the total costs of loans. Additionally, in June 2024, the Federal Reserve took enforcement action against Evolve, claiming that the bank had failed to adequately monitor its fintech partners.
