Thousands of motorists are being offered a refund on their car insurance after a leading bank misled them over the cost of no claims bonus protection.
Customers who took our car insurance through Tesco Bank between April 2020 and 14 September 2021 were collectively charged £1.2 million more than they had been led to believe as the bank “failed to display the additional cost… clearly, prominently and accurately”.
The Competition and Markets Authority (CMA) said that this meant customers were unable to make a properly informed choice about whether or not to include no claims protection on their policy.
The CMA found that Tesco Bank understated the cost of the protection by an average of around £10 per customer and ordered the provider to contact all 124,451 affected drivers to explain the situation.
Customers will be able to keep the policy or cancel it and obtain a refund.
The CMA investigated after being informed of the error by Tesco Bank. In its response to the bank it said: “Had customers been properly advised by Tesco Bank about how much their insurance premium renewal would have reduced by removing no claims bonus protection, they would have been better able to make an informed choice of whether or not to include it in their policy.”
Tesco 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.”
It said that so far less than 1% of customers had chosen to take the 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.”