Retail giant Walmart sues credit card partner Capital One in a lawsuit filed in the U.S. District Court for the Southern District of NY. Their spokesperson confirmed to the media that the bank had failed to live up to the terms and conditions of the agreement signed mutually with respect to the customer service standards expected and committed “five or more times in a rolling twelve-month period”, leading to the termination of the contract.
Walmart suing Capital One – Events leading to it
The Arkansas-based retail giant has made a public statement mentioning the fact that the events leading to the lawsuit, involve failure on major counts of the terms of the contract as far as the Bank is concerned. Their spokesperson confirms that the bank has failed on multiple instances of “regarding timely payment processing and transaction posting,” leading to major customer dissatisfaction. It also claimed the bank came in below the service standard level in the contract for mailing replacement credit cards within a certain amount of days during the 12-month period.
Justification issued by The Bank
A spokesperson of the bank said the suit is “an attempt to renegotiate the economic terms of the partnership it agreed to just a few years ago or end the deal early.” The “servicing issues” are “immaterial and cured by the pursuant to the terms of the agreement without harm to customers, the program or Walmart,” according to the spokesperson. “They dispute that Walmart has any right to change the terms of the existing partnership mid-stream, and we will vigorously protect our contractual rights in court,” the spokesperson said.
Since 2018, Capital One (ticker NYSE: COF) has been the exclusive issuer for Walmart’s (WMT) private-label and co-branded credit card program in the U.S. But last week, America’s largest retailer filed to end the partnership, arguing that the bank had failed to meet certain terms of the contract.
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