Are YOU owed a Tesco Bank refund? 124,451 car insurance customers are entitled to cash back after watchdog ruled they were misled about price of no claims bonus
- Motorists who got car insurance from Tesco Bank are being offered refunds
- Nearly 125,000 customers were ‘misled’ over price of no claims bonus
- Competition watchdog ordered bank to offer its customers refunds
Thousands of British motorists who got their car insurance from Tesco Bank are being offered refunds after the UK’s competition watchdog ruled that customers had been shown the wrong price in renewal letters.
Nearly 125,000 Tesco Bank customers were ‘misled’ into thinking that their no claims bonus (NCB) protection was cheaper than it was.
NCB protection is additional cover drivers can buy which protects their no claims discount in the event of an accident.
In its ruling, the Competition and Marketing Authority (CMA) said that Tesco Bank had ‘provided misleading information’ in renewal letters sent to 124,451 customers between April 2020 and September last year.
The watchdog concluded the cost of the protection was ‘understated on average by around £10 for each customer’.
It has now ordered the bank to explain to customers that they can either choose to keep the policy or get their money back.
Thousands of British motorists who got their car insurance from Tesco Bank are being offered refunds after the UK’s competition watchdog ruled that customers had been shown the wrong price in renewal letters
‘This error meant that motorists were unable to make a fully informed decision as to whether they wanted no claims bonus protection,’ the CMA said.
‘Had they been told the right price, they may have decided to cancel their no claims bonus protection or switch to another, cheaper provider. Thanks to our action, Tesco customers will now have the chance to decide whether they want to keep their current protection or get their money back.’
It said that Tesco Bank had failed to ‘clearly, prominently and accurately’ displace the additional cost of a no claims bonus protection. This meant that customers did not understand the value in removing the protection from their deal.
Tesco Bank reported the problems to the CMA itself. The bank said: ‘We apologise for this error, which we have now fixed.
‘All existing customers who were impacted have been contacted with the option of a refund and the removal of their no claims bonus protection.
In its ruling, the Competition and Marketing Authority (CMA) said that Tesco Bank had ‘provided misleading information’ in renewal letters sent to 124,451 customers between April 2020 and September last year
‘However, the overwhelming majority of customers are choosing to retain their protection. In all cases there was no impact on the cover provided to our customers.’
Around 0.5 per cent of customers who have been contacted have so far chosen to get a refund.
In 2015, the CMA concluded an investigation into private motor insurance. At the time it found that the price of no claims bonus protections was often unclear to customers.
As a result, the watchdog created a legal order which forced providers to clearly state the cost of the protection.
The CMA added: ‘Given the action being taken by Tesco Bank, the CMA does not consider it appropriate to take formal enforcement action in relation to this breach at present.
‘The CMA will monitor the resolution of this breach and Tesco Bank’s future compliance closely.’
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