03:44 PM EST, 12/23/2024 (MT Newswires) -- The US Consumer Financial Protection Bureau said Monday that it sued retail giant Walmart ( WMT ) and financial technology company Branch Messenger on allegations that they forced delivery drivers to use costly deposit accounts to get paid.

The companies breached federal law for about two years starting in 2021 by opening Branch Messenger accounts for new last-mile drivers without their consent, the consumer watchdog alleged. The company deposited drivers' pay into those accounts without their authorization and required them to use the accounts or face termination, according to the complaint.

Drivers part of Walmart's ( WMT ) Spark Driver program paid more than $10 million in junk fees to Branch Messenger to instantly transfer their earnings to their preferred account, the CFPB said in a statement.

"Walmart ( WMT ) made false promises, illegally opened accounts, and took advantage of more than a million delivery drivers," CFPB Director Rohit Chopra said. "Companies cannot force workers into getting paid through accounts that drain their earnings with junk fees."

The watchdog alleged that the companies misled drivers about the availability of same-day access to their earnings and that Branch Messenger engaged in various "illegal activities" pertaining to consumer accounts, including failing to probe alleged errors.

"The CFPB's rushed lawsuit is riddled with factual errors and contains exaggerations and blatant misstatements of settled principles of law," a Walmart ( WMT ) spokesperson said to MT Newswires in an e-mailed statement. "The CFPB never allowed Walmart ( WMT ) a fair opportunity to present its case during their rushed investigation," the spokesperson said, adding that the company aims to defend itself in a court.

Branch Messenger didn't respond to MT Newswires' request for comment.

Walmart ( WMT ) shares were down 2.3% in Monday late-afternoon trade. The stock has jumped nearly 72% so far this year.

Last month, the company raised its full-year outlook after logging stronger-than-expected fiscal third-quarter results amid gains across all segments.

On Friday, the CFPB said it sued JPMorgan Chase ( JPM ) , Bank of America ( BAC ) , and Wells Fargo ( WFC ) for not being able to protect consumers against alleged "widespread fraud" on the Zelle payments network.

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