Walmart Files Lawsuit Against Capital One for “Poor Customer Service” Following Previous Suit Against Synchrony Over “Not Taking on Risky Customers”

Walmart has sued Capital One over “Poor Customer Service” just four years after suing Synchrony for “not taking on risky customers”.

We heard a story like this one back in 2019, when Walmart sued Synchrony on their co-brand card. Remember when Walmart sued Synchrony on their credit card, claiming that Synchrony was refusing to underwrite weak credit card accounts? The WSJ reported that Walmart filed an $800 million lawsuit against Synchrony, claiming lost revenue by Synchrony’s underwriting standards. The suit was later dropped, around the time Walmart shifted their relationship to Capital One.

Now if you have been in the credit card business for a while, you’d know that Capital One works low and mid-range FICO Scores better than most. They have a solid collection infrastructure, leading edge analytics, and they know how to price risky credit card accounts.

-Payments Journal

I seriously doubt that Walmart cares about things such as how quickly transactions post to your credit card or how long it takes on hold to speak to someone at Capital One.

For what it’s worth, I have a Capital One Walmart card and I use it all the time and have never had trouble.

Given Walmart’s last lawsuit against Synchrony, I think it’s safe to say that the real reason for the lawsuit against Capital One may also be about the bank not wanting to take on super bad credit risks so they can shop at Walmart and leave the bank exposed to all of the potential carnage.

I think Walmart doesn’t want to be in the news (again) for complaining that their customers are a bunch of broke deadbeats who don’t pay any of their bills on top of all of the losses they’re taking to shoplifters who set the store on fire to run out with television sets, and that they want their banking partners to be a bunch of bottom-feeding low lives who will take on any risk no matter how bad just to keep the Walmart account.

Capital One is a bank that makes a lot of money working the low end of the income spectrum, so it’s unclear as to who the next bank would even be.

For what it’s worth, Capital One Bank is suing Walmart right back, and in their complaint, they basically accuse Walmart of trying to Darth Vader the contract in the middle of its term and using the lawsuit to gain leverage.

I have no idea where this will end, but I can say I’ll be less inclined to just shop at Walmart without the incentives provided by their card.