Thousands of Tesco Bank customers are set to be in line for a refund.
This comes after it was revealed that the Tesco Bank told their customers about their no claims bonus protection would be around £1.2 million cheaper collectively than it actually was.
The bank wrote to 124,451 customers between April 2020 and September last year, and misled them into thinking their policies would be £10 cheaper.
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As Hull reports, the Competition and Markets Authority (CMA) said that once Tesco Bank explains the situation to customers, the customers can choose to keep the policy or get a refund.
The CMA said: “This error meant that motorists were unable to make a fully informed decision as to whether they wanted no claims bonus protection".
“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 reported that Tesco Bank had failed to “clearly, prominently and accurately” displace the additional cost of a no claims bonus protection.
This resulted in customers not understanding 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.
“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.”
So far, around 0.5 percent of customers who have been contacted have chosen to get a refund.
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.”
