Walmart hit with bombshell lawsuit accusing retail giant of massive privacy breach
Walmart has been hit with a federal lawsuit alleging it misled more than a million of its independent delivery drivers.
Regulators allege the supermarket giant secretly opened bank accounts for these workers without their knowledge.
It is understood that the reason behind Walmart’s actions was to reduce fees when paying the drivers, who make ‘last-mile’ deliveries from Walmart stores via Spark’s fast delivery service.
The Consumer Financial Protection Bureau’s lawsuit alleges that the company used the driver’s Social Security numbers and other personal information to open accounts on the payment platform Branch Messenger. The move has cost drivers more than $10 million in fees since 2021.
According to the lawsuit, Walmart told its drivers they would be fired if they did not use Branch to receive their wages.
The lawsuit also alleges that thousands of drivers’ wages were deposited into the accounts before they even agreed to the terms and conditions.
Drivers who didn’t want (or couldn’t) access their Branch accounts often lost their Walmart delivery orders, as well as any wages already deposited into those accounts.
Walmart also allegedly told their drivers they would have immediate access to their money, but instead the platform offered them a complex system to transfer the money to their regular checking accounts, the lawsuit said.
Walmart’s US CEO John Furner poses in front of a Walmart electric delivery truck, the company is accused of misleading its delivery drivers
Branch Messenger’s “instant” transfer option came with a fee that over the years meant drivers paid more than $10 million to Branch, the lawsuit states.
Other options took several days for the money to arrive, and both options had daily and monthly limits on the amount of money that could be transferred.
“Walmart made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers,” CFPB Director Rohit Chopra said of the lawsuit.
“Companies cannot force their employees to get paid through bills that take away their revenue with junk fees.”
In response, Walmart said the government agency had filed a “hasty” lawsuit, riddled with “factual errors.”
“The CFPB’s rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of established legal principles,” a Walmart spokesperson said in a statement.
The spokesperson said the company plans to vigorously defend itself “in a court that, unlike the CFPB, respects due process.”
The spokesperson added that the “CFPB never gave Walmart a fair opportunity to present its case during their rushed investigation,” it said.
“Despite the company’s extensive cooperation with the investigation, the CFPB declined to engage with Branch in any meaningful way on this matter, instead expediting to file a lawsuit,” Branch said in a statement.
Walmart delivery drivers were reportedly forced to use a payment platform that was riddled with fees
“This approach makes it clear that this lawsuit has nothing to do with the law or worker protections and everything to do with the media attention garnered by a lawsuit involving one of the world’s largest retailers.”
The consumer agency also recently filed lawsuits against Zelle, Bank of America, JPMorgan Chase and Wells Fargo for “failing to protect consumers from widespread fraud.”
Walmart launched its “Spark Driver” delivery program in 2018, and its drivers are described on the company’s website as “independent contractors and part of the gig economy.”