BENTONVILLE, Ark.—Walmart is suing Capital One to end their credit card partnership agreement, alleging the bank fell short of its customer service standards as the exclusive issuer of Walmart's private label and co-branded credit card program in the U.S.
According to the lawsuit, filed in the United States District Court for the Southern District of New York, Walmart seeks to terminate a deal it inked with Capital One in 2018 "worth in excess of a billion dollars,” CBS News reported.
Capital One struggled to honor its contractual obligations to Walmart, the lawsuit alleges, failing to measure up to its retail partner's customer care standards in "at least five Critical service areas" during a 12-month rolling period.
"Unfortunately, Capital One was consistently unable to meet the customer service standards required by the contract," the lawsuit states. "The [service loan agreements] are … essential to preserving the quality customer service at the core of Walmart's brand."
Additional Allegations
The lawsuit goes on to further allege Capital One failed to deliver replacement cards to customers within a critical five-day period it was obligated to meet "99.9% of the time” and did not consistently post transaction and payment information to cardholders' accounts in a prompt manner. The lawsuit also claims the lender "admitted" it had failed to meet five of Walmart's service standards, CBS said.
CBS added that Capital One is refuting its servicing issues constitute grounds for Walmart to end the companies' partnership. The bank said in an emailed statement to CBS that the lawsuit is part of Walmart's effort to "renegotiate the economic terms of the partnership" or "end the deal early."
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