Capital One, Walmart reach settlement in customer service lawsuit

Update:

• Capital One and Walmart Inc. reached a settlement to end the retail giant’s claims that the credit card company was unable to meet the customer service standards detailed in a 2018 contract between the two companies. 
• The two parties jointly filed a notice of the settlement June 19 in a New York federal court. The letter did not contain specific details of the settlement.
• In April 2023, Walmart filed a complaint against Capital One alleging it wasn’t meeting customer services standards and later argued the contract held a termination clause allowing it to end the agreement if Capital One failed to meet its customer service standards five or more times during a 12-month period. 

Walmart Capital One lawsuit overview: 

• Who: Walmart has asked a New York federal court to allow it to terminate its contract agreement with its credit card partner Capital One. 
• Why: Walmart argues Capital One has been “unable to meet the customer service standards” outlined in a 2018 contract between the two companies. 
• Where: Walmart and Capital One are patronized by consumers nationwide. 
• What are my options: Consumers looking for alternatives to Walmart may be interested in products from Wish. 

(April 27, 2023)

Walmart has asked a federal court in New York to allow it to terminate its agreement with credit card partner Capital One, with the multinational retail corporation arguing the bank has not been able to meet its customers’ needs.

The credit card company is accused of being “unable to meet the customer service standards” outlined in a 2018 contract that required the bank to offer “carefully defined levels of service to Walmart and its customers,” Law360 reports. 

Walmart customers in the U.S. have reportedly been issued Walmart-branded Capital One credit cards under the companies’ contract. 

The retailer argues it now has the right to terminate that contract, due to Capital One allegedly having “repeatedly failed to meet several of the most important requirements,” Law360 reports. 

Capital One, meanwhile, is reportedly arguing Walmart does not have a right to terminate the contract, according to Walmart. 

“Walmart thus files this case to seek a judicial declaration of its right to terminate the contract as a result of Capital One’s service failures,” Walmart said, according to Law360.

Capital One failed to mail credit card replacements within five business days, as required, Walmart says

Walmart argues Capital One failed to meet its customer service standards by allegedly failing to mail its customers credit card replacements within a max of five business days. 

Capital One reportedly admitted last year it had failed to meet the credit card replacement time requirement, in addition to four other “critical” standards, including ones involving payment processing and transaction posting. 

Walmart has claimed that, per its contract agreement, the credit card company only needs to fail to meet one of its “critical” standard requirements for the retailer to be able to terminate the deal, according to Law360. 

A federal judge in Illinois earlier this month partially dismissed a lawsuit filed by the Federal Trade Commission accusing Walmart of looking the other way on more than $200 million worth of allegedly fraudulent money transfers. 

Are you a Walmart customer that has been unsatisfied with Capital One’s customer service? Let us know in the comments.

Walmart is represented by Jesse Panuccio, Matthew L. Schwartz, Marc Ayala, Sabina Mariella and Jason Hilborn of Boies Schiller Flexner LLP.

The Walmart Capital One lawsuit is Walmart Inc., et al. v. Capital One, et al., Case No. 1:23-cv-02942, in the U.S. District Court for the Southern District of New York.

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