Unauthorized Bank Accounts? CFPB Targets Walmart, Branch Messenger

Walmart Inc. and its financial technology partner, Branch Messenger Inc., are at the center of a lawsuit filed by the U.S. Consumer Financial Protection Bureau (CFPB), alleging unauthorized bank account openings for delivery drivers in the Spark Driver program.

According to the CFPB, both companies required Spark delivery drivers to receive payments through accounts opened without proper consent. The lawsuit, filed in federal court in Minnesota, claims that drivers faced termination if they refused to comply with the mandate.

CFPB Director Rohit Chopra stated that the companies engaged in deceptive practices that exploited over one million delivery drivers. Walmart and Branch Messenger, however, have refuted these claims. Branch Messenger emphasized its confidence in its payment model, pledging to defend the allegations in court. Walmart described the CFPB’s findings as erroneous and characterized the investigation as hasty.

The CFPB alleges that the financial accounts, managed through Branch Messenger and Evolve Bank & Trust, imposed significant costs on drivers. Drivers reportedly encountered long delays and hidden fees when accessing their earnings. A 2 per cent fee or $2.99 minimum charge applied to immediate fund transfers, while free transfers took up to five days. Limited communication regarding the no-cost transfer option allegedly left many drivers unaware of its availability.

Daily and monthly limits on fund transfers further restricted drivers, compounding difficulties in accessing their wages.

Branch Messenger’s collaboration with Evolve Bank & Trust to provide deposit accounts and debit card services has raised concerns. The CFPB noted Evolve’s prior association with Synapse Financial Technologies, which declared bankruptcy earlier this year.

Introduced in 2018, Walmart’s Spark delivery service connects third-party drivers to fulfill online orders. The retailer has highlighted significant growth in its U.S. e-commerce sales, reporting a 20 per cent rise in the latest quarter.

However, the lawsuit signals deeper regulatory challenges for Walmart’s financial and logistics operations.

The enforcement action against Walmart and Branch Messenger is part of the CFPB’s increased focus on regulatory oversight. Earlier this month, the agency filed lawsuits against major banks over fraud concerns related to Zelle and imposed caps on overdraft fees.