Tesco Bank to refund thousands of motor insurance customers due to renewal blunders
THOUSANDS of drivers who got their car insurance from Tesco Bank are being offered refunds after they were shown the wrong price in renewal letters.
The cost of protection was shown as cheaper than it was, by around £10 on average, the competition watchdog said.
Just over 125,000 car insurance customers were not told the correct cost of the no claims bonus protection offered on the policy renewal.
The letters went out between April 2020 and September 14, 2021, the Competition and Markets Authority (CMA) said, and the bank told the watchdog about the error.
Tesco Bank is now offering refunds to customers affected and is contacting them directly.
They can choose to take the refund or keep the no claims bonus protection.
The CMA said this broke the rules because customers must be clearly presented with how much the protection costs.
A CMA spokesperson said: "This error meant that motorists were unable to make a fully informed decision as to whether they wanted no claims bonus protection.
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"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.”
The letters were sent with the wrong price for no claims bonus protection - but the total amount including the protection was correct.
The error has not affected customers' cover at any point, the bank said, and around 0.5% of customers who have been contacted have chosen to get a refund.
Tesco Bank said in a statement: “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.
"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.”
A no claims bonus is a discount on your insurance premium for not making a claim.
The discount amount depends on your insurer and how long you ahve gone without claiming.
According to figures from Confused.com, a driver with five years no claims bonus would pay an average of £713 for car insurance compared to £559 for a driver with nine years of no claims.
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Meanwhile Barclaycard customers are getting refunds of up to £300 out of the blue - could you be one of them?
And there's one month left for anyone who had a loan from Provident, Satsuma and other providers to claim money back over mis-selling.
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