The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against retail giant Walmart and payroll service provider Branch Messenger, alleging that the companies engaged in illegal payment practices for gig workers. According to the complaint, Walmart opened direct deposit accounts using Spark delivery drivers' social security numbers without their consent, and the accounts came with high fees that drained workers' earnings.

The CFPB claims that Walmart and Branch Messenger violated the Consumer Financial Protection Act of 2010 by requiring Spark drivers to receive their compensation through Branch Accounts, opening these accounts without informed consent, and making deceptive statements about the service. The alleged violations occurred over a period of approximately two years, starting around June 2021.

The lawsuit, filed in the US District Court for the District of Minnesota, accuses Walmart of making false promises to Spark drivers, including a pledge to provide same-day payments through the platform starting in July 2021. However, the company failed to deliver on this promise, instead forcing drivers to use Branch Accounts with fees that added either 2 percent or $2.99 per transaction, whichever is higher.

Spark delivery workers have been complaining about Walmart's Branch Messenger account requirements for years, citing the lack of option to direct deposit to a preferred credit union or local bank. According to the complaint, Walmart allegedly told workers they would be terminated if they didn't accept the Branch accounts.

CFPB Director Rohit Chopra stated, "Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers. Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees." The lawsuit seeks to hold Walmart and Branch Messenger accountable for their alleged actions and to provide relief to the affected Spark drivers.

This lawsuit highlights the ongoing concerns surrounding the treatment of gig workers in the tech industry. As the gig economy continues to grow, regulatory bodies like the CFPB are increasingly scrutinizing the practices of companies that rely on these workers. The outcome of this lawsuit could have significant implications for the industry, potentially leading to changes in the way companies compensate and interact with their gig workers.

In recent years, there has been a growing trend towards greater protections for gig workers, with some states and cities introducing legislation to improve their working conditions and benefits. This lawsuit could be a significant step towards holding companies accountable for their treatment of gig workers and ensuring that they are fairly compensated for their labor.