The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against U.S. retailer Walmart and financial services company Branch for allegedly opening accounts with expensive deposit fees on behalf of its employees.
The CFPB alleges that Walmart forced its “last mile” delivery drivers through Walmart’s Spark Driver program to use Branch accounts to access their paychecks, threatening to terminate employees who wouldn’t comply with the fintech company’s requirements, including its expensive service fees.
Users were forced to pay fees just to transfer their paychecks into their own accounts.
“Walmart made false promises, illegally opened accounts and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said. “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
“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 responded in a statement to CBS MoneyWatch.
Branch claimed in its own statement that the government agency included “intentional omissions” and misrepresented “the law and facts.”
“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,” said the company.
Walmart has supposedly been forcing delivery drivers to access payment through Branch since 2021, opening accounts for the drivers without their consent using personal information such as their Social Security Numbers. Drivers refusing to use Branch reportedly risk termination.
Drivers working for the retailer have paid a collective total of $10 million in servicing fees, or “junk fees,” since 2021 simply to transfer their paychecks into their own accounts.
“Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” CFPB Director Rohit Chopra said.
The post Walmart Forced A Million Workers To Use Bank Accounts With Expensive ‘Junk Fees’ To Receive Paychecks: Feds appeared first on International Business Times.
