Tesco customers to be paid £43m after blunder by firm's banking arm

Tesco is paying a total of £43million to ­thousands of its customers after loan errors.

The banking arm of Britain’s biggest retailer has apologised to customers who failed to receive statements on time.

Online Tesco Bank admitted it breached industry rules and is handing back interest and charges to 175,000 loan and credit card customers for the period the statements were delayed.

The blunder is a fresh blow to the troubled supermarket , which has been plunged into crisis after “over-stating” profits. Last week it emerged the Serious Fraud Office is launching a criminal probe into a £263million black hole.

Tesco faces a £43million compensation bill for the bank statement delays, which date back to 2008. The average payout is £228.

A customer who got a £120 cheque said: “It’s nice to receive an unexpected cheque, but I hope it is an act of good faith and not an attempt to hide a wider problem.

“I’d paid this loan off and had forgotten about it until the letter and cheque arrived.”

Tesco says the “technical breach” of rules was discovered after regulators told all banks to check procedures under the 2008 Consumer Credit Act.

The bank has already set aside £240million for customers who were miss-sold payment protection insurance. The firm is still reeling from the suspension of eight executives over allegations they cooked the books and profit warnings which has seen its value halve. Last month Tesco revealed its half-year profits had slumped 91 per cent to £112m.

Watchdogs praised the compensation decision. Eddy Weatherill of the Independent Banking Advisory Service said: “Tesco have held their hands up. For that I applaud them and I applaud them even more for compensating customers.

“The big four banks would have waited for the regulators to intervene.” A Tesco spokesman said: “As stated earlier, we have put in place a redress programme to return interest and charges to customers who did not receive documentation in line with the requirements of the Consumer Credit Act.” ...Mirror