CFPB Sues Walmart and Branch Messenger for Alleged Pay Reimbursement Scheme

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and Branch Messenger, alleging that they forced delivery drivers to use costly deposit accounts for pay reimbursement and misled workers about how they could access their earnings. The lawsuit, which was filed in late December, highlights the alleged exploitation of over 1 million delivery drivers who work with Walmart.

Background on the Allegations

According to the lawsuit, Walmart and Branch opened Branch accounts for last-mile Spark drivers without their consent. These Spark drivers are independent contractors who work with Walmart to fulfill delivery requests. The CFPB alleges that Walmart told these drivers that using Branch was a requirement to get paid and that those who refused would be terminated.

Misleading Workers About Access to Earnings

The lawsuit also alleged that Walmart and Branch misled workers about the availability of same-day access to earnings. Drivers had to follow a complex process to access their funds, which resulted in delays or fees if they needed to transfer money into a different account. This led to workers paying more than $10 million in fees to transfer earnings.

CFPB Director’s Statement

"Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers," said CFPB Director Rohit Chopra. "Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees."

Walmart’s Response

Walmart has not responded to a request for comment on the lawsuit.

Branch Messenger’s Alleged Illegal Activities

The CFPB also alleged that Branch engaged in a number of illegal activities related to consumer accounts, including:

• Failing to investigate alleged errors
• Failing to honor stop-payment requests
• Failing to maintain necessary records
• Failing to provide certain disclosures
• Illegally requiring consumers to waive their rights under the law

CFPA and the CFPB’s Authority

The Consumer Financial Protection Act (CFPA) gives the CFPB the authority to take action against institutions violating consumer financial protection laws, including:

• The Truth in Savings Act
• The Electronic Fund Transfer Act
• Prohibitions on unfair, deceptive, or abusive acts or practices under the CFPA

Walmart’s Recent Worker Benefits Initiatives

Despite the allegations, Walmart has made efforts to improve worker benefits. In June 2024, the big-box retailer announced that:

• Walmart associates would have access to an associate-to-technician pipeline program
• More skills certificates would be available to associates
• A new bonus program allows hourly store workers to earn up to $1,000 in bonuses a year
• New features in the Me@Walmart app give associates easier access to their pay, discounts, learning opportunities, and benefits

Additionally, store managers now receive an annual grant of company stock, which could be worth as much as $20,000 annually, depending on the size of the store. A new compensation plan was also announced last year, including a pay raise and redesigned bonus plan.

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