Walmart sues long-time financial partner and it fires back
A nearly 20-year partnership between Walmart and Synchrony Financial is ending on a sour note.
The discount giant has filed a lawsuit against its former credit card issuer, claiming that the company was in breach of contract. According to the lawsuit, Walmart said that some of the underwriting standards at Synchrony hurt the retailer’s business financially. The discounter is seeking damages of no less than $800 million.
“We made every attempt to resolve this business dispute and avoid litigation, however Synchrony has failed to take responsibility for its actions,” according to a statement from Walmart. "We fully expect Synchrony to manufacture counterclaims in an effort to shift the focus away from its own conduct.”
Synchrony fired back, issuing a statement in which it called the lawsuit “nothing more than an attempt by Walmart to exert leverage and avoid the contractually defined process for valuing the loan portfolio that Synchrony has serviced on behalf of millions of Walmart customers for the last 20 years.”
“It is unfortunate that, despite our good faith efforts to resolve this commercial dispute amicably and in accordance with the contract, Walmart walked away from discussions and rushed to file suit,” the statement read. “Ultimately, Walmart is trying to avoid paying the fair market value for the portfolio as required by our contract.”
Calling Walmart’s claim “completely baseless,” Synchrony said it in-tends to vigorously defend its position. The company said it will file claims that demonstrate “Walmart failed in the most basic elements of our contract, including its promotion of the card program both in stores and online.”
Walmart announced in July that it would be replacing Synchrony’s services with Capital One Financial. Starting August 1, 2019, Capital One will be the exclusive issuer of Walmart’s private label and co-branded credit card program in the United States.
The discount giant has filed a lawsuit against its former credit card issuer, claiming that the company was in breach of contract. According to the lawsuit, Walmart said that some of the underwriting standards at Synchrony hurt the retailer’s business financially. The discounter is seeking damages of no less than $800 million.
“We made every attempt to resolve this business dispute and avoid litigation, however Synchrony has failed to take responsibility for its actions,” according to a statement from Walmart. "We fully expect Synchrony to manufacture counterclaims in an effort to shift the focus away from its own conduct.”
Synchrony fired back, issuing a statement in which it called the lawsuit “nothing more than an attempt by Walmart to exert leverage and avoid the contractually defined process for valuing the loan portfolio that Synchrony has serviced on behalf of millions of Walmart customers for the last 20 years.”
“It is unfortunate that, despite our good faith efforts to resolve this commercial dispute amicably and in accordance with the contract, Walmart walked away from discussions and rushed to file suit,” the statement read. “Ultimately, Walmart is trying to avoid paying the fair market value for the portfolio as required by our contract.”
Calling Walmart’s claim “completely baseless,” Synchrony said it in-tends to vigorously defend its position. The company said it will file claims that demonstrate “Walmart failed in the most basic elements of our contract, including its promotion of the card program both in stores and online.”
Walmart announced in July that it would be replacing Synchrony’s services with Capital One Financial. Starting August 1, 2019, Capital One will be the exclusive issuer of Walmart’s private label and co-branded credit card program in the United States.