The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and payment app Branch Messenger, alleging that the company opened over 1 million deposit accounts for delivery drivers without their consent and charged excessive fees.
The CFPB claims that Walmart’s Spark Driver program paid drivers more than $10 million in fees to use the Branch app for instant transfers. However, drivers were forced to follow a complex process to access their funds, which included paying $2 fees per cash withdrawal from Branch ATMs.
Workers reported difficulties accessing their physical debit cards and making withdrawals, with some even being unable to write checks or make deposits without paying fees. The CFPB also alleged that Branch placed limits on ATM withdrawals, preventing drivers from withdrawing enough cash to pay bills on time.
The agency says Walmart drivers were misclassified as independent contractors for tax purposes, which meant their bank accounts were labeled as business accounts and subject to different terms and conditions. This led to the opening of accounts without individual account holders’ permission or a know-your-customer review.
The CFPB is seeking to stop “unlawful conduct,” provide redress for harmed consumers, and impose a civil money penalty that would be paid into the bureau’s victims relief fund.
Source: https://www.americanbanker.com/news/cfpb-sues-walmart-and-branch-over-opening-accounts