Thousands of Tesco Banking customers are entitled to a refund following a widespread error

Thousands of Tesco Banking customers are entitled to a refund following an error.

The lender told customers their protection bonus would be around £1.2m lower than it turned out to be.

The Competition and Markets Authority (CMA) said the bank will offer customers the option of keeping the policy or getting a refund.

Find out more: Read the latest Tesco news

The AMC said: ‘This error meant that motorists were unable to make a fully informed decision about whether they wanted loss-free premium protection.

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“Had they been told the right price, they might have decided to cancel their bonus protection or switch to another cheaper provider.

“Thanks to our action, Tesco customers will now have the option of deciding whether they want to keep their current protection or get their money back.”

The CMA said Tesco Bank failed to clearly and accurately shift the extra cost of claim-free bonus protection, meaning customers did not understand the value when removing protection.

Tesco Bank said: “We apologize for this error, which we have now corrected.

“All existing customers who have been affected have been contacted with the option of a refund and the removal of their no-claims bonus protection.

“However, the overwhelming majority of customers choose to keep their protection. In any case, there was no impact on the coverage offered to our customers.

About 0.5% of customers contacted chose to be reimbursed.

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Seven years ago, the CMA concluded an investigation into private auto insurance.

At the time, he found that the price of health bonus protections was often not clear to customers.

As a result, he created a legal order that required providers to clearly state the cost of protection.

The CMA added: “In view of the action taken by Tesco Bank, the CMA does not consider it appropriate to take formal enforcement action in respect of this breach at this time.

“The CMA will closely monitor the resolution of this breach and Tesco Bank’s future compliance.”

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