Financial Fiasco: Walmart and Partner Accused of Exploiting Delivery Drivers
A shocking revelation has surfaced, alleging that retail giant Walmart and its financial technology partner, Branch Messenger Inc., opened costly bank accounts for thousands of delivery drivers without their consent. This bombshell accusation comes from the US Consumer Financial Protection Bureau (CFPB), which has filed a lawsuit against the two companies in a Minnesota federal court.
Forced into Costly Accounts
According to the CFPB, Walmart required drivers participating in its Spark Driver program to receive payment through these expensive accounts or risk being terminated. The agency claims that Walmart and Branch Messenger misrepresented the terms of these accounts, promising instant access to pay when, in reality, drivers faced weeks of delays and exorbitant fees.
Fees and Delays
The CFPB alleges that drivers were charged a fee of either 2% of the transferred amount or $2.99, whichever was greater, for immediate access to their pay. A no-fee option was available, but it came with a wait time of up to five days, and few drivers were aware of this alternative. Moreover, the firms imposed daily and monthly limits on how much drivers could transfer out of their accounts.
Walmart’s Response
A Walmart representative has disputed the allegations, citing factual errors in the complaint and claiming that the CFPB did not provide a fair opportunity for the company to present its case during the investigation.
Branch Messenger Pushes Back
A spokesperson for Branch Messenger has also denied the allegations, stating that the company stands behind its model and services and will vigorously defend itself against the lawsuit.
CFPB Cracks Down
This enforcement action marks the latest in a series of crackdowns by the CFPB, which has intensified its efforts in recent weeks. The agency has taken aim at several major banks over their handling of Zelle fraud and has implemented an overdraft fee cap.
Spark Delivery Service Under Fire
Walmart launched its Spark delivery service in 2018, relying on third-party drivers to deliver online orders to customers’ homes. The retailer has reported a significant increase in e-commerce sales, with a 20% rise in the US during the most recent quarter.
The Fallout
As the CFPB continues to investigate, the consequences of this alleged exploitation could be far-reaching. The incident raises questions about the treatment of gig economy workers and the role of financial technology companies in facilitating exploitation.
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