The Consumer Financial Protection Bureau (CFPB) announced on Dec. 23 that it was taking action against Walmart and Branch for allegedly violating federal consumer financial protection laws.
Walmart operates the Spark Driver Program to facilitate last-mile deliveries from its stores, offering deliveries or shopping orders to drivers who then drop them off at a customer’s requested address similar to DoorDash and Instacart deliveries.
The CFPB asserts that these actions amounted to deceptive practices that cost drivers millions of dollars in junk fees.
The lawsuit contends that the defendants forced delivery drivers to receive payments exclusively through Branch accounts, withholding wages and threatening to fire those who did not comply.
Regulators say that in some cases, Walmart and Branch misrepresented the speed at which drivers could access their earnings, eventually charging them extra when they attempted to transfer funds to personal accounts.
The CFPB’s complaint also alleges that Branch engaged in a broader series of infractions, such as failing to properly investigate errors, refusing to honor stop-payment requests, and requiring drivers to waive certain legal rights.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” said CFPB Director Rohit Chopra in the press release, adding that the companies’ alleged actions violated federal laws meant to protect workers and consumers.
“Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”
The CFPB is seeking to halt the disputed practices, recoup money for those affected, and impose penalties on the companies involved.
Walmart did not respond to a request for comment on the suit from The Epoch Times on Monday.
In an emailed statement to The Epoch Times from a Branch spokesperson, the company categorically defended its practices.
“Branch strongly disagrees with the lawsuit filed today by the CFPB, which misstates the law and facts, and includes intentional omissions to mask the Bureau’s clear overreach,” the emailed statement said.
“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. Despite the company’s extensive cooperation with its investigation, the CFPB refused to engage with Branch in any meaningful way about this matter, instead rushing to file a lawsuit.”
Branch said the company believes that CFPB’s litigation has “nothing to do with the law or protecting workers and everything to do with the media attention garnered by a lawsuit involving one of the world’s biggest retailers.”
“Branch stands behind its model and services, and will defend this action vigorously,” the statement said. “We remain dedicated to helping companies accelerate payments and empower working Americans to grow financially.”
