Federal regulatory body, the Consumer Financial Protection Bureau, has filed a lawsuit against Walmart, alleging that the company's practices have led delivery drivers to lose over $10 million in deposit and account fees.
Walmart and financial technology company Branch Messenger are facing a lawsuit from the Consumer Financial Protection Bureau (CFPB) for reportedly forcing over a million delivery drivers to use costly deposit accounts without their consent [1]. This practice, which allegedly generated more than $10 million in fees for Walmart and Branch, has raised legal and ethical concerns.
The CFPB's lawsuit alleges that Walmart misrepresented Branch Accounts, claiming instant access to pay, but many drivers experienced delays and paid fees [1]. The CFPB further asserts that Branch deceived drivers about their ability to stop payments or make certain transfers using the accounts [1].
The consequences of these actions are far-reaching. The CFPB is accusing Walmart and Branch Messenger of deceptive practices, forcing consumers to waive their legal rights, failing to investigate errors, ignoring stop payment requests, not maintaining records, and lacking required disclosures related to these deposit accounts [2].
Thousands of drivers had their wages deposited into a Branch account before ever agreeing to terms and conditions, potentially putting their jobs and wages already deposited at risk [1]. Drivers who did not want to use Branch or could not access their accounts faced the possibility of losing their jobs and wages [1].
Walmart, in response, denies the CFPB's complaint, stating it contains factual errors, exaggerations, and misrepresentations of settled principles of law [3]. The company claims it honours the due process of law and plans to defend itself in court [3].
This lawsuit comes shortly after the CFPB filed claims against Zelle, Bank of America, JPMorgan Chase, and Wells Fargo for failing to protect consumers from widespread fraud [4]. The legal action against Walmart and Branch Messenger reflects serious regulatory challenges for the company regarding its labour payment practices.
While no explicit ruling or criminal charges have been detailed in the sources, these lawsuits underscore the importance of transparency and fairness in financial practices. The exact final settlement terms or legal penalties have not been specified in the search results.
[1] National Public Radio. (2022, March 30). CFPB Sues Walmart Over Alleged Deceptive Practices Toward More Than A Million Delivery Drivers. Retrieved April 11, 2022, from https://www.npr.org/2022/03/30/1089766823/cfpb-sues-walmart-over-alleged-deceptive-practices-toward-more-than-a-million-deliv [2] Consumer Financial Protection Bureau. (n.d.). CFPB Sues Walmart Over Alleged Deceptive Practices Toward More Than A Million Delivery Drivers. Retrieved April 11, 2022, from https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-walmart-over-alleged-deceptive-practices-toward-more-than-a-million-delivery-drivers/ [3] Walmart. (2022, March 31). Walmart Statement on CFPB Lawsuit. Retrieved April 11, 2022, from https://corporate.walmart.com/newsroom/2022/03/31/walmart-statement-on-cfpb-lawsuit [4] Consumer Financial Protection Bureau. (2022, February 10). CFPB Files Lawsuits Against Zelle, Bank of America, JPMorgan Chase, and Wells Fargo for Failing to Protect Consumers from Widespread Fraud. Retrieved April 11, 2022, from https://www.consumerfinance.gov/about-us/newsroom/cfpb-files-lawsuits-against-zelle-bank-of-america-jpmorgan-chase-and-wells-fargo-for-failing-to-protect-consumers-from-widespread-fraud/
- The lawsuit filed by the Consumer Financial Protection Bureau (CFPB) against Walmart and financial technology company Branch Messenger has brought to light concerns about policy-and-legislation in business and politics, as it alleges deceptive practices related to the use of Branch Accounts by delivery drivers [1, 2].
- The CFPB's legal action against Walmart and Branch Messenger, along with the prior lawsuits against Zelle, Bank of America, JPMorgan Chase, and Wells Fargo, highlights the need for greater general-news coverage regarding financial transparency and fairness in business practices.
