cfpb allegations against walmart: Walmart Allegedly Opened Unauthorized Bank Accounts for Over 1 Million Drivers: CFPB Files Lawsuit todayheadline

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Walmart and fintech company Branch Messenger, alleging that over one million Walmart delivery drivers were forced to use unauthorized deposit accounts to access their earnings. According to the complaint, Walmart and Branch created these accounts using drivers’ personal information, such as Social Security numbers, without their consent. Drivers were reportedly charged millions in fees to transfer wages to other accounts, sparking criticism about unfair labor practices and the exploitation of gig workers.The CFPB alleges that since 2021, Walmart’s Spark Drivers—classified as independent contractors—were compelled to accept their wages through Branch deposit accounts. Drivers faced threats of job loss if they refused to comply, according to the lawsuit. Accessing earnings often required a “complex process,” leading to delays of up to weeks in some cases. Additionally, drivers paid a combined total of $10 million in fees to transfer funds to personal bank accounts, despite promises of “instant access.”

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CFPB Director Rohit Chopra criticized these practices, stating, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees.”

Walmart and Branch Deny Allegations

Walmart strongly refuted the CFPB’s claims, describing the lawsuit as “rushed” and “riddled with factual errors.” In a statement, Walmart asserted that the CFPB failed to give the company a fair chance to defend itself and vowed to “vigorously” contest the case in court. Branch also denied wrongdoing, stating that its services provide “quick and easy access to funds” and accusing the CFPB of filing the lawsuit for media attention rather than worker protection.Also Read : Christmas Eve 2024: Store Hours for Costco, Walmart, Target, Lowe’s, and More

This lawsuit has reignited debates around the classification and protection of gig workers, who often rely on app-based jobs like Uber, DoorDash, and Lyft. The CFPB’s lawsuit follows similar cases under the Biden administration, including legal action against major banks for failing to prevent fraud on payment apps like Zelle.

FAQs:

What is the lawsuit against Walmart about?
The CFPB alleges that Walmart and Branch Messenger opened unauthorized bank accounts for over 1 million delivery drivers and forced them to use these accounts to access their paychecks.How did Walmart respond to the allegations?
Walmart denied the accusations, calling the CFPB’s claims factually incorrect and exaggerated. The company said it plans to defend itself in court.