Paige Smith
(Bloomberg) — Walmart Inc. and one of its financial technology partners allegedly opened expensive bank accounts for delivery drivers without their consent, a US consumer protection agency said on Monday.
The Consumer Financial Protection Bureau sued Walmart and Branch Messenger Inc., claiming they required those in the Spark Driver program to be paid through costly accounts or be fired.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said in a statement after the agency sued the two companies in the US District Court for the District of Minnesota.
Neither Walmart nor Branch Messenger responded to a request for comment.
It’s the latest enforcement action for the CFPB, which has cranked up its pace in the waning days of the Biden administration. The agency sued three of the country’s largest banks over their handling of Zelle fraud and finalized an overdraft fee cap this month.
The CFPB said Walmart required the delivery drivers to use Branch Messenger, a fintech that offers workers deposit accounts and debit cards through their employers. Branch Messenger partners with Evolve Bank & Trust to offer those accounts. Evolve has been recently scrutinized for its fintech-bank partnerships due to the relationship it had with the firm Synapse Financial Technologies Inc., which went bankrupt earlier this year.
In addition to opening the accounts without consent, the CFPB claims Walmart and Branch Messenger also misrepresented that drivers could instantly access their pay.
Walmart launched its Spark delivery service in 2018 and relies on the third-party drivers to deliver online orders to homes. The retailer said last month that e-commerce sales rose over 20% in the US during the most recent quarter.