When I received my latest Tesco Bank credit card statement I noticed a couple of unexpected charges so phoned Tesco to determine what they were. They said it was related to an insurance premium I’d paid with the card and all payments to financial institutions are now deemed to be cash transfers. They also said they’d informed me of this change back in May. Apparently is was included with the statement but as I have opted for paperless statements, I’m not sure I ever received it (perhaps a well disguised hyperlink at the end of an email saying my statement was ready to review online?).
They eventually sent me a hard copy of the revised terms and conditions I believe section 2 is the relevant section:
·A handling fee of 3.99% (minimum £3.00 charge) of the amount for cash withdrawals from ATMs, over the counter at a branch or from a cash provider.
·A handling fee of 3.99% (no minimum fee) of the amount of cash transactions. Cash transactions are gambling transactions, wire or international money transfers, repaying borrowing (e.g. loans and mortgages), purchasing non-sterling currency outside of Tesco, payments to prepaid or virtual cards, investments, share trading and spread betting.
There is no mention of payments made to financial insurance and I do not see how such insurance payments could be construed as repaying borrowing from the above conditions.
They also told me that I would have received a Consumer Credit Agreement with the insurance that would confirm this was a fixed sum loan agreement and that this means the insurance is repaid finance and this charge is correct.
I dont recall receiving a Consumer Credit Agreement and it wasnt attached to the Policy Welcome email. Even if it was sent it to me then I would have already paid the premium by the time it was sent so I could not have used my debit card instead.
I eventually received a letter from them 13 days after phoning them saying that theyd suspended the charges whilst they investigated my complaint.
In the mean time I contacted my insurer and they came back with this response, we are aware that Tesco Bank are applying charges to credit card purchases of insurance products. This is something that ******* Insurance do not have control over and the charges applied are not for our benefit. In our eyes you have paid the premium in full therefore no such agreements would be necessary. I think the information you have been given regarding the repaying borrowing must only apply to their rules of transactions. I have investigated this and no other credit card providers are treating the transactions as such.
So, be very careful what you use your Tesco CC to pay for or you will incur some unexpected charges.