Belmont Thornton Logo

Tesco payment protection

Tesco was one the first major retailers to branch out and start offering loans and credit cards to its customers. As the country’s leading supermarket it now provides an array of financial products and insurances. Just one of these products is Tesco payment protection insurance.

Payment protection insurance is controversial. For many years it was widely sold, but it has come under scrutiny in recent years after it emerged the cover had been widely mis-sold across the financial world. The cover is also accused of being expensive and offering poor value for money to customers.

On loans, Tesco payment protection and similar cover provided by other lenders is usually applied as a percentage of the overall borrowing. Typically this is between 13%-25%. On a loan of £10,000, therefore, you may expect to pay between £1,300 and £2,500 for the insurance. The cover will also normally attract interest at the same rate as the base loan. This can mean the customer’s debt is significantly increased and it may take them much longer to repay the loan.

On credit card PPI, such as Tesco payment protection, is usually applied on a monthly basis. The average credit card PPI policy costs approximately 79p per £100 outstanding on the balance. On a credit card balance of £10,000, therefore, the customer may pay around £79.00 per month for the cover.

The question of the value provided by these policies is raised when the level of policy payouts is looked at. A 2008 survey by The Competition Commission found that only 15% of customers who tried to use their loan PPI policy received a payout and just 11% of those attempting to use a credit card PPI policy. This suggests that many customers may be paying for expensive cover that they may never be able to use and certainly calls into question the value for money such insurance may offer.

Another significant issue with payment protection insurance is that it has been widely mis-sold. The issue of mis-selling was first exposed by investigations by The Financial Services Authority and The Office of Fair Trading (OFT) in 2006 and, as a result, there has been an enormous increase in the number of unhappy customers making claims for mis-selling. In the same year the OFT also investigated back charges applied to credit cards for late payments and over the limit fees. Their investigation revealed that many fees applied routinely by credit card companies and banks were unfair.

It was revealed that some lenders applied charges of up to £35 for late payments and over the limit fees with many customers having fees applied to their accounts multiple times. Lenders defended these fees by saying they were necessary to cover costs incurred, but the OFT found that £12 was a reasonable maximum charge. As a consequence, most lenders have now lowered their charges. If you paid excessive and unfair charges in the past, though, you may be entitled to make a complaint. Since the OFT’s finding were released thousands of unhappy customers have begun claiming back bank charges they regard as unfair.

If you think you have been mis-sold a Tesco payment protection policy or you would like to claim back unfair credit card charges, call our team on 0207 471 2000.

Tell a Friend
blog comments powered by Disqus

Enquiry Form

First Name 
Last Name 
Mobile Phone
Home Phone
Address Line 1 
Post Code 
Claim Back Mis-Sold PPI Button

Belmont Thornton Limited is regulated by the Claims Management Regulator in respect of regulated claims management activities; our registration is recorded on the website number 18273

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B11, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

Belmont Thornton Limited is registered with the Information Commissioners Office. Registration number Z1728023.

Please note that calls may be monitored for the purposes of staff training.

* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

By using our web-site, you agree that we can place the types of cookies described in our privacy policy on your device.Hide