Barclays Bank UK PLC, trading as Tesco Bank · DRN-5734292

The complaint Mr C is unhappy that Barclays Bank UK PLC, trading as Tesco Bank, charged him cash transaction fees when he purchased two gift e-vouchers. What happened Mr C purchased two gift e-vouchers using his Tesco credit card. When Mr C received his next monthly statement, he saw that Tesco had charged him cash transaction fees for those two transactions. Mr C wasn’t happy about this, so he raised a complaint. Tesco responded to Mr C and explained that the cash transaction fees had been charged correctly and in line with the terms of their credit card. However, as a gesture of goodwill they agreed to waive one month’s interest on Mr C’s account to allow him time to pay the cash transaction fees without incurring any interest on them. Mr C wasn’t satisfied with Tesco’s response, so he referred his complaint to this service. One of our investigators looked at this complaint. They didn’t feel that Tesco had acted unfairly by applying the cash transaction fees to Mr C’s account, but they did note that Tesco hadn’t applied the one month interest waiver that they’d said they would, and that Mr C had been charged £1.58 interest as a result. Because of this, our investigator upheld the complaint in Mr C’s favour and said that Tesco should pay the £1.58 back to him. Mr C remained dissatisfied, so the matter was escalated to an ombudsman for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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The terms and conditions of the Tesco credit card explain that a cash transaction fee will be applied to transactions classed as cash transactions. The terms then give a list of the types of transactions that would be considered as cash transactions, and this list includes ‘payments to prepaid or virtual cards’. When Mr C purchased his gift e-vouchers, he was making a payment to a prepaid virtual card. As such, I’m satisfied that Tesco have applied these fees to Mr C’s account correctly. In their view of this complaint, our investigator indicated that Tesco had said that the terms explicitly used the term ‘gift cards’. Indeed, when Tesco referred to the terms in their defence of this complaint, they did list the wording of the terms as being ‘payments to prepaid or virtual cards (including Gift cards). This wording is different to the official terms. Notably, the wording quoted by Tesco has some other wording for some of the clauses that is different to the official terms, and in consideration of this I feel that what’s likely to have happened is that the staff member that liaised with this service copied the wording from an internal system source which was slightly different to the official terms. However, I feel that the important point here is that the official terms, which to reiterate state ‘payments to prepaid of virtual cards’, do cover gift cards and gift e-vouchers – because gift cards are prepaid cards and gift e-vouchers are prepaid virtual cards. As such, even accepting that Tesco’s quoting of the terms was incorrect, I’m satisfied that the application of the cash transaction fees by Tesco was fair when considered against the correct terms. Mr C notes that he’s made similar purchases previously that didn’t incur a fee. That may have been the case, but it doesn’t follow from those past events that Tesco have acted unfairly by applying the fee in this instance. Indeed, given that I’m satisfied that the cash transaction fees have been applied fairly, I feel that any mistake that Tesco may have made regarding prior similar purchases have likely been in Mr C’s favour. However, I will be upholding this complaint because while Tesco explained to Mr C that they would apply an interest waiver to his account for one month, so that he could repay the cash transaction fees without incurring interest on them, Tesco don’t appear to have then applied that interest waiver, such that Mr C incurred £1.58 interest. Because of this, I have to uphold this complaint in Mr C’s favour to instruct Tesco to reimburse that £1.58 back to him. Putting things right If they haven’t done so already, Tesco must reimburse the £1.58 interest back to Mr C. My final decision My final decision is that I uphold this complaint against Barclays Bank UK PLC, trading as Tesco Bank on the basis explained above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 8 October 2025. Paul Cooper Ombudsman

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