Walmart and FinTech company Branch are facing a lawsuit from the Consumer Financial Protection Bureau (CFPB) for allegedly opening accounts for gig economy delivery drivers without their consent. The CFPB claims that the companies required drivers to receive their pay through these accounts, collected excessive fees, and failed to provide the promised instant access to pay.
The lawsuit centers on Walmart’s Spark Driver program, which utilizes gig economy drivers for last-mile deliveries from Walmart stores, and Branch’s deposit account accessible through a digital app and debit card. CFPB Director Rohit Chopra stated that Walmart made false promises and took advantage of over a million delivery drivers by draining their earnings with junk fees.
Both Walmart and Branch have vowed to vigorously defend themselves against the allegations. Walmart criticized the CFPB’s lawsuit, citing factual errors and a lack of due process during the investigation. Branch, on the other hand, stated that the lawsuit misrepresents the law and facts and emphasized the quick and easy access to funds that their services provide to Walmart and the drivers.
The CFPB’s lawsuit seeks to stop the companies’ unlawful conduct, provide redress for affected consumers, and impose a civil money penalty. Spark Driver, a network of freelance drivers using a Walmart-designed app, plays a crucial role in Walmart’s competition with Amazon deliveries. Businesses are increasingly focused on fast payments to meet consumer expectations for instant satisfaction, as highlighted by Branch CFO Brian Whalen.
In conclusion, the legal battle between Walmart, Branch, and the CFPB underscores the importance of transparency and fair practices in the gig economy. As the case unfolds, it will be interesting to see how these companies address the allegations and uphold their commitment to serving both their workers and consumers.
