Tesco Bank customers who have been granted payment holidays on credit card bills have been told that their credit scores could be affected - despite warnings from the financial regulator.
A number of customers who have applied for three month breaks on the back of the coronavirus pandemic have been advised that their credit files could be at risk.
Almost a million credit card payment holidays have been granted in the UK, after the Financial Conduct Authority (FCA) announced 90-day payment holidays for households who have been significantly impacted by the Covid-19 crisis in April.
It means customers can apply for a temporary payment freeze on loans and credit cards for up to three months.
Under it, credit scores will not be affected as taking a payment holiday will not be considered as a missed payment.
Have you been affected by this? Get in touch emma.munbodh@mirror.co.uk
However, Tesco Bank customers who have been granted credit card payment holidays are getting emails from credit agencies saying that they have defaulted on payments and their score could be harmed, according to the Sunday Times.
Tesco admitted there are some cases "where a missed payment has been registered [with credit agencies] before the payment break has been processed".
Around 1.6million people have taken a credit break on things like personal loans, mortgages and car finance agreements in the past nine weeks, according to banking trade body UK Finance.
These are designed to help households who have been financially impacted by coronavirus, such as bill payers who have been placed on furlough.
Under credit card measures, the FCA also said customers can apply for an interest-free £500 for three months.
If you've been sent a warning letter from a credit reference agency such as Equifax or Experian, get in touch with your lender as soon as possible.
Explain that you have been granted a payment holiday and, where your score has been affected, ask for a correction.
If your bank or building society refuses to cooperate, you can raise a complaint, and, after six weeks, take it to the Financial Ombudsman.
A Tesco Bank spokesman told Mirror Money that any customers affected by the payment glitch will have their credit files rectified.
"We moved quickly to implement a payment break option for customers impacted by COVID-19," a statement said,
"If a customer has successfully applied for a payment break, we will ensure there is no impact on their credit file.
"There are some cases where a payment has been taken from the customer, or a missed payment has been registered, before the payment break has been processed.
"If this happens we retrospectively fix the credit file to remove the missed payment from the report and ensure the customer’s score and payment history is protected for the duration of the agreed payment break. We will also return any late payment fees incurred."
Credit card payment breaks explained
Overdrafts: Consumers struggling can apply for an interest free £500 overdraft on their main account.
Credit cards, store cards and catalogue credit: Customers struggling can ask for a three-month payment freeze or to pay a nominal payment on credit cards, store cards and catalogue credit. Firms can consider other measures, such as reductions in monthly payments, if appropriate. Customer cards would not be suspended during this period.
Personal loans: Customers with personal loans who face difficulties with their finances as a result of coronavirus can ask for a three-month freeze if needed.
