Walmart has been slapped with a bombshell federal lawsuit that claims it deceived more than a million of its independent delivery drivers.
Regulators have alleged the grocery giant secretly opened bank accounts for these workers without their knowledge.
It is understood the rationale behind Walmart’s actions was to lower its fees when paying the drivers, who make ‘last-mile’ deliveries from Walmart stores via the Spark speedy delivery service.
The lawsuit by the Consumer Financial Protection Bureau alleges that the company used driver’s social security numbers and other personal information to open accounts on the payment platform Branch Messenger. The move has cost the drivers over $10 million in fees since 2021.
Walmart allegedly told its drivers that they would be sacked if they didn’t use Branch to receive their pay, according to the government lawsuit.
The lawsuit also alleges that thousands of the drivers had their wages sent to the accounts before they had even agreed to the terms and conditions.
Drivers who either didn’t want to – or were unable to – access their Branch accounts often lost their Walmart delivery jobs, as well as any wages that had already been deposited into those accounts.
Walmart also allegedly told their drivers they would have instant access to their money, but instead the platform presented them with a complex system to transfer the money into their normal checking accounts, the lawsuit states.
Walmart U.S. CEO John Furner poses in front of a Walmart electric delivery van, the company has been accused of deceiving its delivery drivers
Branch Messenger’s ‘instant’ transfer option came with a fee that over the years meant the drivers paid more than $10 million to Branch, the lawsuit argues.
Other options took several days for the money to arrive, and both options had daily and monthly limits on how much money could be transferred.
‘Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,’ CFPB Director Rohit Chopra said of the lawsuit.
‘Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.’
In response Walmart said the government agency filed a ‘rushed’ lawsuit filled with ‘factual errors.’
‘The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law,’ a Walmart spokesperson said in a statement.
The spokesperson said the company plans to vigorously defend itself ‘before a court that, unlike the CFPB, honors the due process of law.’
The spokesperson added that the ‘CFPB never allowed Walmart a fair opportunity to present its case during their rushed investigation,’ it said.
‘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 in a statement.
Walmart delivery drivers were allegedly forced to use a payment platform loaded with fees
‘This approach makes clear that this 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.’
The consumer bureau has also recently filed lawsuits against Zelle, Bank of America, JPMorgan Chase and Wells Fargo for for ‘failing to protect consumers from widespread fraud.’
Walmart launched its ‘Spark Driver’ delivery program in 2018 and its drivers are described as ‘independent contractors and part of the gig economy,’ on the company’s website.
