From 1st June, Tesco Bank began charging *all* transactions recharged via Curve card to their Credit Card as a cash advance with a fee of 3.99% and charging interest from the day of the transaction.
I just wanted to register my dissatisfaction at the way Tesco Bank have unilaterally decided to charge all transactions on Curve as 'cash advances'.
First of all - Tesco Bank are the only organisation doing this - Natwest, Barclaycard, Virgin, Creation, MBNA etc. are all allowing them to purchase normally as transactions. How does Tesco Bank justify charging for transactions which are being sent as purchases (and are treated by literally every other card company as purchases)?
Secondly - many customers, myself included, received absolutely no notice of the change whatsoever. Apparently, only customers who used Curve cards over a specific 2 day period in April were sent letters. This is quite simply not good enough. It is beyond awful customer service to start charging customers for their regular activity. Because of the way transactions are posted several days after the transaction - the first time I became aware of the issue was on the 4th of June, by which time I'd already accrued charges of around £60 and interest.
Thirdly - even though we can, thankfully, move the transactions to other less draconion card providers using Curve's 'go back in time' feature, we are apparently stuck with whatever charges have been accrued before we became aware of the issue, plus whatever interest was accrued. Absolutely no flexibility or understanding offered by customer services whatsoever.
Totally and completely unacceptable that Tesco Bank behave in this way.
I currently use Tesco Bank for my main current account, savings and credit cards. I'm also about to buy my first home and was considering using Tesco Bank for a mortgage. If this is how they choose to treat customers I shall be closing all my accounts and going elsewhere. It is the most anti-customer banking experience I have been through in my life.
To top it off, I've just forked out a £150 annual fee for a 'Premium' credit card. The way this has been managed and I've been treated is so far from 'Premium' it's a joke.
It is absolutely ridiculous; there is no cash element to the transaction at all, and as said below, it was impossible to foresee Curve purchases being treated in this way from the wording in the letters sent out. Tesco are required to be clear and not misleading in their Ts&Cs so I just cannot see how this won't get overturned, even if it has to go through FOS. Why companies continue to shoot themselves in the foot by refusing to do the obviously right thing in the first place is baffling; short-termism at its worst. Curve on the other hand have been great.
I’m really sorry to read your posts and I want to make you all aware that we take your concerns seriously. All of our credit card customers were notified in April that we were making changes to our credit card fees and specifically how non-purchase transactions, like topping up a pre-paid card or buying foreign currency outside of Tesco Bank, were now going to be treated as cash transactions.
@ScottW, can we then take that as confirmation that Tesco will; soon be charging for any transactions made via Paypal and other such services, as Curve functions in EXACTLY the same way as this (funds transferred to an FCA regulated body and immediately transferred to a third party)
Hi @DJASHPOLE1, thanks for your post. PayPal is an online payment service provider, acting as a payment intermediary for direct purchases for goods or services. This is why no fees will be applied when using PayPal unless the merchant processing the payment makes us aware that the funds are being used as cash transaction, such as a wire transfer or investment transaction.
Curve is a debit card and similar to Paypal also operates as a payment intermediary for direct purchases for goods or services. Curve accounts cannot be topped up and the funds are pulled from the payment card (like Tesco) for a specific transaction.
Curve, as a payment service, operates in the same way as a prepaid card, requesting funds to be pulled into their account before being transferred to the merchant or withdrawn via ATM. As this money can then be used in any way, such as making a cash withdrawal or gambling,
Any customers that used their card for services, like Curve, between May 2017 and April 2018 got a second letter in May to ensure that they understood how these changes would affect them in future. I’m sorry @WillPS that you didn’t receive this letter as you hadn’t used your Curve card at this point.
I first used my Tesco card with Curve on 22nd March 2018, and I did not receive a letter in May.
"ll of our credit card customers were notified in April that we were making changes to our credit card fees and specifically how non-purchase transactions, like topping up a pre-paid card or buying foreign currency outside of Tesco Bank, were now going to be treated as cash transactions."
Not true. I have held a (normal, not premium) Tesco Clubcard Credit Card since 2014. I have not received a letter regarding that card. I challenge you to find a letter bearing my name and address with this information.
"Any customers that used their card for services, like Curve, between May 2017 and April 2018 got a second letter in May to ensure that they understood how these changes would affect them in future. I’m sorry @WillPS that you didn’t receive this letter as you hadn’t used your Curve card at this point."
Again, not true. It appears to all intents and purposes that a "second" letter was only sent to customers who purchased during a two day window in March/April when Curve were mistakenly sending transactions with the wrong code, an error which has since been remedied.
I am not among this group - at the time I had a standard Tesco card, which was not assigned to my Curve card (which I've held for almost a year). At the end of April I applied for and received a Premium Credit Card which I immediately assigned to my Curve card, and used without issue for a month before these charges started appearing.
The charges appeared without warning. I haven't received anything - again I challenge you to find a letter with my name and address on; that's what the ombudsmen will want to see. I am absolutely certain that I haven't received one.
"Curve cards operate in the same manner as prepaid cards whereby money is transferred from your credit card account to your Curve card prior to being passed from Curve to the retailer. The changes made to our fees mean that a transaction of this nature to a prepaid card is classified as a cash transaction, and so therefore carries the same fee."
That's completely untrue. Curve operates in the same way that PayPal does, whereby they process the transaction and then charge your selected payment card. If Tesco Bank are charging intermediaries - Tesco Bank should be applying the charge to PayPal too.
My Curve is not a prepaid card by the way, it is a Mastercard Debit card, exactly like the ones issued by Clydesdale, Yorkshire, Starling, Monzo and Danske Banks (and soon to be issued by TSB and Santander).
If you wouldn't mind, I'd quite like it if you replied with a proper response to each of the 3 points of concern I have outlined in my original post. To make it easy - I'll truncate it in to 4 one sentence questions:
Why do Tesco Bank charge customers cash fees for using credit cards, when literally no other card issuer are making this charge?
Why were a subset of customers given absolutely no notice whatsoever of charges?
Why are customers being stuck with cash advance charges even after getting the purchases refunded?
Why have customer service personnel been given absolutely no leeway to waive these fees, particularly given the complete lack of notice?