MSE News: Tesco Bank credit card-holders stung with unexpected charges after...

jamesd

Superscrooge wrote: »

We're are giving our credit card customers a little extra help this Christmas. Simply use your credit card in store and at tesco.com between 1st November and 31st December 2016 and we'll give you 0% interest on purchases until your March 2017 statement. Visit tescobank.com to learn more. Terms, conditions and exclusions apply.
... the wording of the advert has mislead a lot of their customers.

Notice that the ad says 0% on purchases but doesn't constrain it to Tesco purchases? Nor to future purchases?

Spend a penny at Tesco in a store and also at tesco.com and all of your purchases anywhere including past ones will be interest free until the March statement is what that ad is suggesting.

In my opinion Tesco owes customers who read that ad and fulfilled the conditions in the ad a refund of all interest charged on purchases from anywhere from the time of the second purchase needed to qualify to March.

Would have been very different if the ad had said "those purchases" instead of just "purchases" though I expect that most readers will not have made both of the purchases required to qualify for the offer.

The "in store" wording also seems likely to confuse if Tesco was constraining it to mean in a physical store instead of in any store including in an online store.

jockblue

jamesd wrote: »

Those purchases were settled first then Tesco did what normal card issuers do and charged interest on those from the date of purchase to the date of payment if the bill wasn't paid in full. That's what a reasonable person could normally expect to happen unless an offer said something non-standard would be done.

It wasn't packaged as a balance transfer/money transfer deal on the card, it was packaged as a additional time limit to pay us back if you shop with us on our card....

If you get a promotional offer, you expect that the terms and conditions for the card are temporarily changed. In this case the purchases from Tesco become interest free for three months. The "implication" to many "reasonable" people was that there would be no change to any other purchases. Now there are two interpretations to this -


1) that the over-riding principle of paying your balance off in the current month attracts no interest charge, and therefore by paying off the non-Tesco purchases would allow this to continue as normal or
2) that the over-riding principle of not paying your card off in full will attract interest payments from the date of purchase.


For those paying off in full each month with a variety of Tesco and Non-Tesco purchases, this deal was significantly worse than normal useage of the card. I'm surprised and disappointed that Tesco issued a scheme with these pitfalls without thinking about it.

redux

jamesd wrote: »

Would have been very different if the ad had said "those purchases" instead of just "purchases" though I expect that most readers will not have made both of the purchases required to qualify for the offer.

Hmm, the plot, or the fog, thickens.

Use your Tesco Credit Card in store and at Tesco.com between 1st November and 31st December 2016 and we’ll give you 0% interest on those purchases until your March 2017 statement. Terms, conditions and exclusions apply

Tesco website.

Also, there might be another sting in the queue for people who don't read the terms

Any purchases and balances outside the offer period will be charged at your standard interest rate.

The offer period expires on the statement date as detailed in the offer, after which any remaining balance(s) will revert to the relevant interest rates, as stated in the 'Summary of Balances' section of your statement. Your statement date is the date your statement was produced, not your payment due date.

So to avoid or reduce interest at or from that point pay up by that statement or very shortly afterwards, not the payment due date that follows.

phillw

redux wrote: »

You are simultaneously arguing that the other purchases attract interest and that they do not.

But the payment made does indeed go against the non-Tesco purchases.

I don't think this is a payment allocation issue.

If you pay off your credit card balance in full then normally you don't pay any interest. This is because they waive the interest from the date of the transaction until the payment due date. However, they only do this if your balance was zero at the beginning of the billing period. If you have a non zero balance at the start of the billing period then they start charging interest from the day the transaction was made & you lose one of the benefits of using a credit card.

You get a similar issue with 0% on new purchase cards for 12 months, if you pay off your bill when the 0% runs out then any transactions made since the last statement until that day will attract interest. You really should clear the balance to zero on the due date of the preceding statement. However in that circumstance they normally waive the interest if you complain, pay up and setup a full balance direct debit.

If they are advertising 0% on certain purchases then it would be fair to assume that they would exempt those from the calculation, as otherwise their offer is somewhere between pointless, misleading and predatory.

Whoever at Tesco's came up with this is either a scammer genius or shouldn't even be left alone with the office stapler.

jamesd

jockblue wrote: »

It wasn't packaged as a balance transfer/money transfer deal on the card, it was packaged as a additional time limit to pay us back if you shop with us on our card....

The base deal was a normal 0% for purchases deal, aside from issues with how at least one ad described it.

jockblue wrote: »

Now there are two interpretations to this -

1) that the over-riding principle of paying your balance off in the current month attracts no interest charge, and therefore by paying off the non-Tesco purchases would allow this to continue as normal or
2) that the over-riding principle of not paying your card off in full will attract interest payments from the date of purchase.

You missed the standard answer:
3) It works like all normal 0% for purchase deals. Charged interest on other purchases from the date of transaction to date of payment unless you clear the whole card balance, including the promotional balance.

But at least one ad has given a seriously misleading description.

realaledrinker

Top & bottom of this is that the offer was either input incorrectly into the Tesco credit card system or the system was incapable of handling the nuances of the offer. Either way, the bosses at Tesco Towers were just as suprised at the outcome as the card holders were.

molerat

No, the offer, and the interest charged, worked exactly as it should have done and exactly as it would have done with any other card. The problem here is either the customer's perception of the offer or misleading advertising of the offer.

dclark82

I was very dubious about this offer when I saw it because I was stung years ago when I continued to spend on a card I'd transferred a balance to on a promotional rate. Learnt the hard way that clearing the month's purchases every month would not avoid interest charges. So, with that in mind, I very carefully read the terms and conditions of this offer and it made no reference to charging interest on additional purchases, even if paid off in full. It made no recommendation to not spend any further on the card if you wanted to enjoy the offer exclusively being offered on Tesco shopping.

When I rang Tesco to query the interest I'd been charged, before I even said it myself they admitted it had been a badly worded offer and they immediately offered to refund all interest. They could see I always usually paid off the balance of my card in full every month and admitted the offer was mainly aimed at those that don't (something else that wasn't mentioned in the 'offer').

I think it's unfair to assume that people should just know how credit cards and their associated offers work. An offer is only valid if the terms and conditions accurately reflect it and it cannot be assumed the consumer knows the ins and outs of credit regulations, nor should they be forced to 'fill in the blanks'. Tesco's immediate recognition of an error at their end confirms this. Needless to say, I don't think I'll be accepting any further offers on my general spending card!

Crabman

molerat wrote: »

No, the offer, and the interest charged, worked exactly as it should have done and exactly as it would have done with any other card. The problem here is either the customer's perception of the offer or misleading advertising of the offer.

Based on the evidence (the number of customers who have fallen victim to this "offer") and the TCF principles set down by the FCA and agreed to by all regulated financial institutions, it can reasonably be deemed that this was indeed misleading advertising.

Furthermore, given Tesco Bank's talent pool, it has to be questioned whether this really was an accidental lapse (in which case, the defensive stance of Tesco Bank must be queried) or a deliberate act.