The Consumer Financial Protection Bureau yesterday announced it had filed two lawsuits — against Rocket Homes and Walmart — accusing one of of an alleged kickback scheme and the other of forcing employees to open costly products in order to get paid. The suits underscore the Bureau’s intensified focus on protecting consumers from anti-competitive practices and deceptive behaviors.
Rocket Homes and The Mitchell Group: Steering Kickbacks in Real Estate
What’s happening: The CFPB alleges that Rocket Homes orchestrated a scheme to steer homebuyers toward its affiliate, Rocket Mortgage, through a network of incentivized real estate agents and brokers. The company purportedly discouraged agents from offering clients competitive mortgage options or discussing programs like down payment assistance that Rocket Mortgage didn’t offer.
- Key allegations:
- Rocket Homes provided kickbacks to real estate agents and brokers in exchange for directing clients exclusively to Rocket Mortgage.
- Agents were pressured to prioritize Rocket Mortgage referrals or face removal from Rocket Homes’ lucrative referral network.
- Jason Mitchell, through The Mitchell Group, reportedly rewarded agents with gift cards for high referral volumes and trained agents to use coercive tactics, such as suggesting that deals could fall through without Rocket Mortgage.
Why it matters: The CFPB’s action marks a robust enforcement of the Real Estate Settlement Procedures Act (RESPA), highlighting risks for companies using referral networks or incentive-based practices that may compromise consumer choice.
Walmart and Branch Messenger: Exploiting Driver Wages
What’s happening: In another suit, the CFPB has accused Walmart and Branch Messenger of coercing Spark Drivers — its gig-economy delivery workforce — into using costly deposit accounts. The accounts, opened without proper consent, subjected drivers to hidden fees and barriers to accessing their earnings.
- Key allegations:
- Walmart and Branch automatically opened accounts for drivers and funneled wages into them without their knowledge or approval.
- Spark Drivers paid over $10 million in “junk fees” to transfer earnings to their preferred accounts.
- Drivers faced delays in accessing their wages and were threatened with termination if they refused to use the accounts.
Why it matters: The lawsuit underscores the CFPB’s broader mission to eliminate “junk fees” and deceptive financial practices that exploit vulnerable workers.
Between the lines: Both lawsuits reflect CFPB Director Rohit Chopra’s push to tackle systemic practices that limit consumer choice or increase financial burdens. As regulatory scrutiny intensifies, companies in the credit and collection industry must evaluate their practices to ensure compliance, particularly in areas involving consumer rights, disclosures, and competition.
