Walmart, Branch Messenger Sued by US Gov't Over Alleged Excessive Fees for Delivery Drivers

The US government has filed a lawsuit against Walmart and payments company Branch Messenger, accusing them of forcing over 1 million delivery drivers to use high-fee accounts to access their earnings, draining over $10 million from their paychecks.

According to the Consumer Financial Protection Bureau (CFPB), Walmart told drivers that they would be fired if they did not collect their pay in Branch accounts, which charged them fees for services such as activation, maintenance, and transfers. The CFPB claims that these fees are "junk fees" that drivers should not have been responsible for paying, as they were not clearly disclosed to them. Branch, a fintech company, is accused of using drivers' personal information to open the accounts without their authorization, making the accounts the only option for drivers to receive their pay.

The CFPB argues that companies cannot force workers to use accounts that drain their earnings with fees, which is a common practice among gig economy companies. Walmart has denied the allegations, stating that the CFPB's lawsuit is "riddled with factual errors" and misstatements of law. Branch has also denied the claims, saying that its services provide quick and easy access to funds. This lawsuit is part of a growing movement to protect freelance workers, including those who work through apps like Uber and Lyft.

The CFPB is seeking to end the alleged conduct, return funds to harmed consumers, and impose fines on Walmart and Branch. This case has significant implications for the gig economy, highlighting the need for clearer regulations and better protections for freelance workers. As the case unfolds, it will be interesting to see how Walmart and Branch respond to the allegations and whether the CFPB's claims are substantiated.

The US government's lawsuit against Walmart and Branch Messenger marks a significant shift in the protection of freelance workers' rights, and its outcome will likely have far-reaching implications for the gig economy. As the case progresses, it will be essential to monitor updates and study the consequences of such lawsuits on the livelihoods of gig economy workers.