US government sues Walmart, Branch Messenger over delivery driver 'junk fees'

WASHINGTON (Reuters) -The U.S. consumer finance watchdog accused Walmart and the workforce payments company Branch Messenger on Monday of forcing more than a million delivery drivers into using accounts that cost them more than $10 million in junk fees.

The Consumer Financial Protection Bureau said in a lawsuit that Walmart had told "last mile" drivers in its Spark Driver program it would fire them unless they collected their pay in Branch accounts opened without their consent, the agency said.

"Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees," CFPB Director Rohit Chopra said in a statement.

Representatives for Walmart and Branch Messenger both rejected the CFPB's allegations, accusing the agency of failing to allow them time to offer explanations and of "rushing" to file the lawsuit.

"We look forward to vigorously defending the company before a court that, unlike the CFPB, honors the due process of law," Walmart said in a statement.

The CFPB has pursued enforcement and regulatory activity in the final days of President Joe Biden's administration, announcing a lawsuit on Friday against JPMorgan Chase, Bank of America and Wells Fargo over their handling of the payments platform Zelle.

Monday's announcement said the agency was seeking to end the conduct in question, to return funds to harmed consumers and impose fines to be paid into the CFPB's victim relief fund.

The suit alleges Walmart and Branch incorrectly told drivers they would have instant access to their wages when in reality they experienced delays or faced fees in transferring their funds elsewhere. It says Branch also deceived drivers about their ability to stop payments or make certain transfers.

(Reporting by David Ljunggren and Douglas Gillison; Editing by Howard Goller and Aurora Ellis)

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