CFPB Sues Walmart, Branch Messenger for Pay Practices for 'Last-Mile' Drivers — 2nd Update

By Denny Jacob

The Consumer Financial Protection Bureau said it sued Walmart and payment platform Branch Messenger for practices concerning delivery drivers' pay and reimbursement.

CFPB's lawsuit alleges that Walmart and Branch opened Branch accounts for Spark drivers, and Walmart then deposited drivers' pay into said accounts without the drivers' consent.

The lawsuit also alleges that Walmart told Spark drivers they were required to use Branch to get paid and that it would terminate workers who did not want to use these accounts, and that both companies misled workers about the availability of same-day access to their earnings. Drivers were made to follow a complex process to access their funds that led to further delays or fees if they needed to transfer the money, resulting in workers paying more than $10 million in fees to transfer their earnings to an account of their choice, the CFPB added.

The agency never allowed Walmart an opportunity to present its case during the investigation, a spokesperson for the company said, adding that the Bentonville, Ark., retailer looks forward to defending itself in court.

Branch said it strongly disagrees with the CFPB's lawsuit, which Branch said misstates the law and facts. "Despite the company's extensive cooperation with its investigation, the CFPB refused to engage with Branch in any meaningful way about this matter, instead rushing to file a lawsuit," the company said. "Branch stands behind its model and services, and will defend this action vigorously."

CFPB said its lawsuit seeks to stop Walmart and Branch's unlawful conduct, to provide redress for harmed consumers and to impose a civil money penalty that would be paid into CFPB's victims relief fund.

Walmart's Spark Driver program encompasses gig-economy drivers who make "last-mile" deliveries from Walmart stores nationwide.

Write to Denny Jacob at denny.jacob@wsj.com