Retail giant Walmart has filed a lawsuit against its credit card issuer Synchrony Financial for allegedly breaching contract terms.
The lawsuit, filed in the US District Court of the Western District of Arkansa, claims that certain Synchrony underwriting standards financially harmed the retailer.
Walmart is seeking damages for the contract breach, and expects them to be nearly $800m. The exact amount will be decided during the court trial.
In July this year, the retailer announced credit card agreement with Capital One Financial, replacing Synchrony. The long-term deal between Walmart and Synchrony is set to expire on 31 July 2019.
Responding to the lawsuit, Synchrony Financial said: “This lawsuit is 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.
“Ultimately, Walmart is trying to avoid paying the fair market value for the portfolio as required by our contract. We believe Walmart’s complaint is completely baseless and without merit, and we intend to vigorously defend our position.”
Synchrony also revealed that it intends to file substantial claims against Walmart. The financial services provide alleged that ‘Walmart failed in the most basic elements of our contract’.
According to Synchrony, the retailer did not even promote its card programme in-store as well as online.
Walmart issued a statement to CI as follows:“Synchrony breached its contractual obligations to Walmart and as a result, the damages to our company are estimated to be at least $800m.
“We made every attempt to resolve this business dispute and avoid litigation, however Synchrony has failed to take responsibility for its actions. We fully expect Synchrony to manufacture counterclaims in an effort to shift the focus away from its own conduct.”