Walmart and its financial technology partner, Branch Messenger, are accused of opening bank accounts for its delivery drivers without their permission by the US consumer financial protection bureau (CFPB). A lawsuit against global retail was filed by the bureau on Monday in a US federal court, according to Bloomberg. The bureau has also alleged reportedly, that Walmart made it compulsory for its drivers under the company’s spark driver programme to receive payments via those accounts or else face termination.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” Bloomberg reported, citing CFPB Director Rohit Chopra.
Walmart’s Spark Driver Programme
In 2018 the global retail giant launched a spark delivery service to deliver orders through third-party drivers and introduced spark driver platforms for the same. The programme offered the drivers flexibility to decide when and where they want to work. The drivers receive payment for their service via a linked bank account or digital wallets, facilitated by third-party providers.
Initially, it was particularly to cater to the requirements of rural and suburban consumers but in nearly six years it has become ‘Walmart’s largest local delivery service provider’, according to the giant’s website. Nearly “hundreds of thousands” are employed under the spark delivery service.
Reportedly, now the drivers have claimed their financial mobility is restricted because of certain conditions imposed by Walmart and its financial technology partner, including fees, delays and account limits.
The bureau, on behalf of the aggrieved drivers, alleged long delays and hinderances, before retrieving funds was seen. Moreover, a transfer fee was charged for those who managed to use the funds. A no-fee transfer required nearly five days for the transaction to get through.
Walmart’s financial technology partner has refuted the allegations. It said, “stands behind its model and services and will defend this action vigorously”, according to Bloomberg. The retail giant has also refused the accusations made by the bureau and has called the allegations against it “riddled with factual errors”.
