Tesco Credit Card charging fees and interest on insurance payments

PixelPound

If you had opted for monthly installments, then it would be a loan agreement, but if paid in full then not. I would complain, especially as others have said their insurance purchases are not seen by Tesco as cash.

Even if you get them refunded as a goodwill gesture, since I doubt their policy will change, look at getting an alternative credit card for future purchases.

Pedr057

Tesco eventually wrote back to me. They conceded that they understood why I thought that I charges shouldn't apply, however, they said they'd interpreted the information provided by the merhcant correctly. From this I understood them to be blaming hte merchant for supplying an inaccurate or wrong merchant code. They did waive the charges and paid me £50 goodwill but it's probably the hardest I've ever had to work for £50 given the time I spent on this issue!


I had this reference number on my statement against the insurance charge AND the cash transaction fee so I doubt it's the mysterious merchant code - 98385803. Presumably there's no way on checking the merchant code?

[Deleted User]

A goodwill gesture is paid if you are out of pocket significantly.

But you had the charges revered as well, so £50 is more than adequate

MimiBelle

I have just received my visa bill to find out I have been charged a £201 cash transaction fee after purchasing a vehicle. I had the vehicle on a three lease plan which at the end of the term I could exchange for a new vehicle, hand back or make a one off payment and take the vehicle. I therefore only had a loan for the three years part of the plan nothing further so in my view the loan ended at the last payment and then I made a separate one off payment to keep the vehicle. I could have made a bank transfer but thinking it would be quicker as they offered credit card payments with no fees I chose this option paying the money straight off my credit card. However I have today received a statement whereby I have been charged by Tesco a £201 cash transaction fee together with additional interest (which they can apparently charge of £38). The credit card had a zero balance prior to the car purchase. I was told that these fees were introduced in June of this year in a brochure they sent through with the statement. I don't usually purchase cars so it's not something I expected. I don't see how Tesco can class this as a loan payment when I had not undertook to make this payment (originally planned to re-lease another new car). Is it worth me complaining to Tescos? Any advice would be gratefully received - thank you for reading

Terry_Towelling

Debateable whether you were paying off finance/credit or not with the car purchase. Technically, that portion of the car's value was taken as credit even though you weren't paying it off as part of the original finance package.

I guess it's hard to argue when the T&Cs are written in such a way as to allow Tesco to make these charges. However, it might be viewed as sharp practice by Tesco unless the transaction was profiled properly as a cash transaction.

It all goes back to the interchange fee flow (that I bang on about from time to time). In a purchase transaction, an interchange fee credit is paid to the card issuer but in a cash transaction, the issuer has to pay away an interchange fee. It is this fee flow that usually determines what your issuer does. If they want to recover the interchange fee, they will pass it on to you in the form of a cash handling charge.

Sadly, we have no way of knowing what transaction profile Tesco received, so we can't say whether they have effectively 'profited' from both the purchase interchange fee and the cash handling fee, or whether they've simply covered their costs for a true cash transaction.

I guess it's largely irrelevant if the T&Cs permit them to do it but I would recommend anyone affected to complain and ask Tesco to prove that they had to pay away a cash interchange fee with the transaction. At least that should make them sit up and take note even if it gets you nothing back.