Walmart Charged With Unlawfully Establishing Bank Accounts for 1 Million Drivers

(VOR News) – The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Walmart and a fintech company called Branch Messenger, alleging that the two companies forced more than a million delivery workers to use costly bank accounts to receive their paychecks. Both of these companies were the targets of the lawsuit.

According to the action filed by the Consumer Financial Protection Bureau (CFPB), Walmart and Branch are accused of opening deposit accounts for Walmart’s Spark Drivers, who are considered independent contractors, without first getting their consent.

These bank accounts contained drivers’ personal data, including their Social Security numbers.

The lawsuit specifically claims that Walmart’s drivers, who are in charge of delivering goods from the company’s warehouses to consumers, are only allowed to have their earnings transferred into these branch accounts.

This goes against the company’s rules, which permit them to move their earnings to different accounts.

Walmart reportedly told employees in 2021 that using these accounts may lead to firing.

Additionally, the lawsuit claimed that accessing profits through the accounts was a “complex process,” typically causing weeks-long delays. Among the other accusations that were made was this one.

This was the predicament they ultimately found themselves in, even though the business had assured them that they would have prompt access to funds.

To make matters worse, according to the Consumer Financial Protection Bureau (CFPB), drivers allegedly paid ten million dollars in “junk fees” to move their earnings to different bank accounts.

Director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, said, “Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees,” in his criticism of the practice. “Junk fees are a waste of money.”

This case’s next section outlined the traits of the average Spark Driver: “in addition to being a woman, having children, not having a college degree, and having a low income.”

Walmart denied the accusations made by the Consumer Financial Protection Bureau (CFPB) and stated in a statement that it will firmly defend itself in court.

Walmart released a statement claiming that the Consumer Financial Protection Bureau’s (CFPB) hurried lawsuit is full of factual errors, exaggerations, and blatant misrepresentations of basic legal principles.

The Consumer Financial Protection Bureau (CFPB) never gave Walmart a chance to make its case in an unbiased way throughout its rushed probe. In contrast to the Consumer Financial Protection Bureau, we are ready to fiercely defend the Company before a court that respects the due process of law principle.

Additionally, Branch was charged by the Consumer Financial Protection Bureau (CFPB) with engaging in deceptive advertising and neglecting to look into and address issues pertaining to the accounts. In addition to earlier accusations, these were also made.

In contrast, Branch denied the accusations and defended its services, saying, “The Consumer Financial Protection Bureau rushed to file a lawsuit despite the company’s extensive cooperation with its investigation, refusing to engage with Branch in any meaningful way about this matter.”

Branch responded to the Walmart accusations with a statement.

Furthermore, Branch claimed that the case was motivated more by a desire for “media attention” than by concerns for the welfare of the employees. This is what he stated in his statement.

This case, which is part of a larger campaign to give these gig workers more rights, targets these individuals who work for firms like Uber, Lyft, and DoorDash who are supposed to be independent contractors. It is considered that gig workers are independent contractors.

Earlier this month, the Consumer Financial Protection Bureau (CFPB) made claims against large financial firms, including Wells Fargo, Bank of America, and JPMorgan Chase.

According to the CFPB, these organizations did not stop fraud on the money-sending app Zelle, which is a platform that lets people send and receive money.

The choice of a new director may have an impact on the outcome of this lawsuit because President-elect Donald Trump is expected to choose a replacement for the present director of the Consumer Financial Protection Bureau (CFPB).

When Jaret Seiberg was employed as a financial services policy analyst at TD Cowen Washington Research Group, she noted that the new director’s strategy for handling such matters would be the deciding element in the case’s future course.

SOURCE: TN

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