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Bad practice from Tesco Mobile

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Short version
Tesco Mobile's payment system is broken and, as a result, they are damaging consumer credit scores.

Long version
On 4th May I decided to upgrade from my old PAYG phone to a pay monthly one with Tesco Mobile. After trying twice to order online and each order failing for vague "verification" issues, I called them directly to place the order.

Everything went fine during the call, I passed the credit check and all that was left to do was click a link in an email they sent and make my initial payment. However when I did that, I got an error saying my payment had been declined and that the order had been cancelled.

Huh. Nothing wrong with my credit card, so I called Tesco and went through the whole process again only to get the same outcome. Payment declined. So I called CapitalOne and was advised that they were unable to complete the payment because Tesco Mobile's payment systems "are not compatible with industry standards". Okaaaaay...

I decided to try a third time, but with my Nationwide debit card. I explained what had happened to the agent and he seemed to think it was because they were migrating between systems, that transactions weren't working on the old one so he would put this order through on the new system. Progress at last!

Went through the lengthy sign-up process again, got the email - different to the first two, showing it was a different system - and... the payment failed again. I called Nationwide and they gave the same reason, i.e. Tesco Mobile's payment systems are not up to industry standards.

I complained to them on Twitter and received this response:

"In January 2022 we decided to change to a new platform our website. When transferring between platforms for the website, certain software was upgraded relating to the 3DSecure service. Part of the migration included changing from internal sales system to a new one. The error you're experiencing is due to the online sales system still being linked to the old system and unfortunately, this is out of date with the latest 3DSecure system the bank are using currently. As it stands, there's no immediate fix for this, or any information to suggest a change will be made to resolve this. As the issue is specific to certain banks and it is 50/50 whether the error occurs or not. Work will continue in the background to try and resolve this once and for all."

So basically they admitted their payment system only works half the time and they have no plan to fix it.

As I was unable to buy from them I asked that the hard credit search be deleted from my file. They refused, saying that the search was valid even though the transaction wasn't completed. I complained through Equifax and got the same result.

The bottom line here is that Tesco Mobile are allowing consumers to apply for contracts and incur hard credit searches on their files knowing full well that half the time they themselves won't be able to process the payments, then, when the payments fail, are refusing to remove the credit searches. Had I known beforehand that there was a 50% chance they wouldn't be able to take my payment but I would be stuck with a hard credit search on my file regardless, I obviously wouldn't have used them (which is probably why they're keeping it a secret, I guess).

The upshot is that if you're trying to get a new contract phone from Tesco Mobile there's a 50% chance you'll end up with two hard credit searches on your file - one from them and one from the other mobile provider you then have to go to because of Tesco Mobile's incompetence - an unquestionably unfair situation. In my case, that second provider declined my application. Who knows what part having the Tesco Mobile search on my file played in that?

Naturally, I am not leaving it at this. I've discussed it with my local MP's office and they asked me to provide them with the correspondence, which I have done. In a week's time I'll also be able to raise a complaint with the Ombudsman Service. If those routes don't provide resolution then I'll be taking Tesco Mobile to court.

So please be warned of the danger Tesco Mobile poses to your credit score if you're thinking of getting a contract mobile with them!
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Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
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    In my case, that second provider declined my application. Who knows what part having the Tesco Mobile search on my file played in that?


    Virtually none, unless your credit file is horrendous.

    It was just one search. Any change in the pretend credit score has no bearing on your chances of getting either a mobile contract or any other form of credit,
  • kaMelo
    kaMelo Posts: 2,458 Forumite
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    edited 17 August 2022 at 6:40PM
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    Whilst it's not great what Tesco have done I'd echo what @Deleted_User said above, one hard search will have next to no impact upon your second application.
    Just buy the phone outright and go SIM only. It is much better value.
  • sassy_one
    sassy_one Posts: 2,686 Forumite
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    You will take Tesco Mobile to court, spending hundreds if not thousands in doing so, with the court delays, meaning any search won't matter by the time of any possible hearing all over one search they won't remove?

    This is MoneySavingExpert and my advice is let it go, as two others have said.
    One search will not damage your credit rating unless it's already substantially damaged.

    Taking Tesco Mobile to court is not only pointless but also a waste of money and time.



  • longjohnjohnson
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    Tesco Mobile are correct here.  Whether they opened an account or not is immaterial.

    You asked for a credit account and they performed a search on that basis. What happened afterwards doesn't matter.

    Would you demand they remove the hard search because you were declined?
  • SwanWhisperer
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    Tesco Mobile are correct here.  Whether they opened an account or not is immaterial.

    You asked for a credit account and they performed a search on that basis. What happened afterwards doesn't matter.

    Would you demand they remove the hard search because you were declined?
    Why would I ask them to remove the search if I was declined? I haven't asked O2 to remove their search because they acted in good faith.

    Tesco know that their payment system is broken and that they can't process a substantial number of transactions, but they don't warn customers of this beforehand and allow applications to proceed that they know will ultimately fail, needlessly saddling those customers with hard credit searches.

    Before a credit search is undertaken you are advised that it will be recorded, may affect your credit score and ask you to confirm that you want to proceed on that basis. But they don't tell you there's a 50/50 chance they can't complete the agreement so your credit score may be affected entirely unnecessarily.
  • SwanWhisperer
    SwanWhisperer Posts: 3 Newbie
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    edited 17 August 2022 at 6:40PM
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    kaMelo said:
    Whilst it's not great what Tesco have done I'd echo what @Deleted_User said above, one hard search will have next to no impact upon your second application.
    Just buy the phone outright and go SIM only. It is much better value.
    Here's the thing though, you don't know if it will have an impact or not. It's easy to say it won't, but none of us really know and every consumer's circumstances are different and every lender will have different criteria. For some people, one search could make all the difference. We are told that it's good practice not to incur unnecessary credit searches. We should be entitled to expect lenders not to conduct them.

    (NB: I have since bought a phone outright. Didn't have much other choice!)
  • kaMelo
    kaMelo Posts: 2,458 Forumite
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    They've done you a favour by forcing your hand. Mobile networks have worked wonders by convincing us we "need" a new handset every couple of years alongside a new improved airtime contract. Now you've bought a phone you will only update it when you do need to rather than when they suggest you need one.

    One hard search for a mobile deal might make a difference to the made up score a CRA give you. If one day a CRA becomes an actual lender then this score will matter, until that day your score is irrelevant as only you see it, lenders judge you on your credit history and one hard search for a mobile will not put anyone off.

    It's not how many searches on file that matter, it's what they are for in combination with your history. One search for a mobile will make zero difference to any other lenders decision, six current account searches will make zero difference if your file is in good shape. A couple of loan or credit card searches combined with late payments/defaults will make a big difference to lenders.

    Don't get hung up on searches and credit scores, do what is in your best interest and your credit history will take care of itself.
  • Alex9384
    Alex9384 Posts: 950 Forumite
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    As usually on this forum, all comments are siding with rubbish company practices.

    It's not about whether one search makes much difference or not, it's about how they are allowed to do that in the first place. It's about the principle.

    If they are unable to provide something they are advertising, not because the applicant is not eligible but rather because their system is broken, then they should remove the search.
     
    EPICA - the best symphonic metal band in the world !
     
  • Alex9384
    Alex9384 Posts: 950 Forumite
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    Tesco Mobile are correct here.  Whether they opened an account or not is immaterial.

    You asked for a credit account and they performed a search on that basis. What happened afterwards doesn't matter.

    Would you demand they remove the hard search because you were declined?

    Huh?
    Tesco are not correct. The OP was accepted, not declined.
    The issue here is not the OP's eligibility, but Tesco's inability to accept payments.

    It's impossible to get their product in 50% of cases, regardless of who is applying, but they perform hard searches in 100% of cases.
    It's their fault, not customers' fault. How in the world is that "correct"?
     
    EPICA - the best symphonic metal band in the world !
     
  • Alanrichard
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    I tried to transfer a Sim only to Tesco Mobile to be refused on two credit cards and a debit card for the princely sum of £7.50 a month. My credit rating is very good.
    My daughter used her card for the transaction.
    I got no joy from Customer Services and have sent two emails to the CEO with no response.
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