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The U.S. consumer finance watchdog sued Walmart and workforce payments provider Branch Messenger, accusing the companies of costing the retail giant’s Spark delivery drivers more than $10 million in extra fees.
The Dec. 23 lawsuit revolves around Walmart’s requirement of its independently contracted Spark drivers to use Branch’s deposit accounts to access payments. According to the Consumer Financial Protection Bureau (CFPB), thousands of drivers had their wages deposited into a Branch account without being consented first.
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Walmart allegedly told the drivers that they would be terminated if they did not want to use the Branch accounts.
When drivers did use the platform, they allegedly faced numerous delays or fees if they needed to transfer money from the Branch account into a different account, which resulted in more than $10 million in added “junk fees.”
If drivers wanted an “instant” transfer to a different bank, these fees would add either 2 percent or $2.99 per transaction, whichever was higher, the complaint said.
Drivers could use a second option that didn’t include a fee, but that could take up to five days and was only available if the receiving account was at a bank that partnered with the same financial data transfer company Branch used.
For both options, Branch also imposed daily and monthly limits on how much money Spark drivers could transfer out of their accounts.
Spark delivery workers have complained about the lack of better payment options, as the Branch Messenger account requirements don’t enable direct deposit to a preferred credit union or local bank.
Since August 2021, Walmart and Branch opened Branch accounts for more than 1 million drivers in the Spark program, which is Walmart’s platform for gig economy workers that fulfill last-mile deliveries from the retail giant’s stores.
Walmart and Branch opened accounts for new drivers by using drivers’ information, including their social security numbers, without obtaining the drivers’ consent, the 60-page suit alleges. Drivers’ pay was then deposited into these accounts without their authorization. Drivers could not access their earnings without agreeing to Branch’s terms and conditions.
The suit also says the defendants misrepresented to drivers that they had instant access to earnings or same-day pay via the Branch account. Spark drivers have never received same-day pay through Branch, the suit said.