Tesco Mobile Limited · DRN-6258907

The complaint Ms O has complained about how Tesco Mobile Limited trading as Tesco Mobile (Tesco) opened a credit agreement in her name, that she did not agree to. What happened In November 2021, Ms O acquired a new device via a credit agreement with Tesco. The agreement had a term of 36 months and payments of around £10 were due each month. In late-April 2025, another device credit agreement was taken out in Ms O’s name with Tesco, for the supply of a new device. The agreement had a term of 36 months and payments of around £55 were due each month. Ms O explained that in April 2025, the 2021 device developed a fault and so she contacted Tesco to enquire about making a claim on her insurance. She said she was assured she would receive a new device if she paid around £50, which would be refunded to her. Ms O agreed, and after reflecting on the call and finding out that more than the agreed amount had been taken from her account, she called Tesco, who assured her she had not been scammed, which eased her concerns. When Ms O received the device, she said it was a newer model, so she queried this with Tesco, who explained she had taken out a new device agreement, but it would arrange collection of the device. She said she was told she would receive a refund of the upfront payment taken, offered one month free as well as 3,000 points. Ms O says she declined this because she felt it was insulting considering the stress and worry Tesco had put her through. Ms O says shortly after receiving the device, she also received calls from a mobile number advising her that the wrong device had been delivered and it needed to be collected, she says she blocked the number. Tesco arranged collection of the device from Ms O and in August 2025 it sent messages regarding missed payments. Ms O says she spent hours trying to resolve the matter across various calls with Tesco, she had to repeat herself and she didn’t get calls back when promised. She was upset that her daughter had been contacted, and said this caused embarrassment. She said she was shocked to find out there was an outstanding balance of around £2,000. Tesco looked into things and explained that it didn’t receive the device back and that it had been lost in transit. As such, it agreed to cancel the credit agreement. Unhappy with how things had been handled, Ms O raised further concerns. She explained that the issue had caused her anxiety and made her feel sick, fearful and distraught. In mid-August 2025, Tesco provided its response to the complaint. It apologised for any upset the matter caused and explained it had tried to reach Ms O following her May and August 2025 complaints, but was unable to reach her. It said that as the device had been lost when it was being returned, it had removed the charges from Ms O’s account and closed it. Tesco offered her £50 or 5000 points, as a gesture of goodwill for any distress and inconvenience the matter caused. It said it did not feel there were service failings and

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believed it had been fair and reasonable in dealing with the matter. Unhappy with this response, Ms O referred her complaint to this service for an independent opinion. One of our Investigators looked into the complaint. He said he was unable to comment on the individuals that committed the fraud, or the actions of the insurance company. He said that it appeared a credit agreement was fraudulently opened in Ms O’s name, which he said wasn’t in dispute. He said that Tesco had written to Ms O in early May 2025, in which it apologised for the confusion, said it suspected she had been the victim of fraud and asked her to get in touch, but he couldn’t see that she got in touch with Tesco until July 2025. He said that Tesco has also been a victim and it had taken actions he would expect in a situation of fraud, by cancelling the agreement and waiving the outstanding balance and as such he didn’t think it would be appropriate to ask Tesco to do anything more. He noted that in mid to late August 2025, Ms O had been promised call backs, but didn’t get one and that after Ms O complained in May 2025 Tesco did not contact Ms O, other than an initial acknowledgement of her complaint. He said he thought that Tesco’s apology and increased offer of £75 in compensation was reasonable in the circumstances. He said he didn’t think Tesco acted unfairly by chasing for payments whilst the investigation was ongoing and he hadn’t seen anything to suggest Ms O’s credit file had been impacted and so he didn’t ask Tesco to do anything more. Ms O didn’t agree, she said that Tesco confirmed she had been a victim of fraud, a call handler agreed there had been difficulties on the call when she agreed to a replacement device and that Tesco had admitted its error. She said she called Tesco on a regular basis after it sent her the early-May 2025 letter until July 2025. She acknowledged that Tesco had been a victim of fraud when it did not receive the device she returned to it, but didn’t accept their offer was fair. She said she felt a decision had not been made about the replacement device. As an agreement could not be reached, the complaint has been passed to me to decide. Since then further information has been provided by both parties and so our Investigator shared his thoughts on this. Tesco explained that the 2025 device agreement was taken out online and provided evidence of this. It said it was not an upgrade, but a new agreement. It also provided a copy of the email address provided when the agreement was taken out and this is a different email address to the one Ms O provided. It also confirmed Ms O had insurance for the device she acquired in 2021. Ms O explained that she was unable to provide evidence of the number she called when she first contacted Tesco, that resulted in the device agreement being taken out, but said that Tesco should have a record of the call. She confirmed she called from a different mobile number than the one linked to her Tesco account, but was unable to evidence this due to the amount of time that had passed. Our Investigator explained that Tesco had provided evidence to show the agreement was taken out online, rather than in a telephone call. He said that whilst Tesco was responsible for the condition of the device it supplied to Ms O in November 2021, he didn’t think Tesco was liable to repair or replace it, given how long Ms O was in possession of the device before the fault came about and because he hadn’t seen any evidence of a fault. As such, he didn’t think Tesco had treated Ms O unfairly by not doing anything more when Tesco became aware of the issue.

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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. In considering what’s fair and reasonable, I need to have regard to the relevant law and regulations, regulators’ rules, guidance and standards, codes of practice and (where appropriate) what I consider to have been good industry practice at the relevant time. Where evidence is incomplete, inconsistent or contradictory, as some of it is in this case, then I’ve based my findings on the balance of probabilities, i.e. what I think is most likely in the circumstances of this complaint. I’m aware I’ve summarised the events of the complaint to some degree. I don’t intend any discourtesy by this – it just reflects the informal nature of our service. I’m required to decide matters quickly and with minimum formality. But I want to assure Ms O and Tesco that I’ve reviewed everything on file. And if I don’t comment on something, it’s not because I haven’t considered it, but it’s because I’ve concentrated on what I think are the key issues. Our powers allow me to do this. Ms O acquired the devices via regulated consumer credit agreements. As such, this service is able to consider complaints relating to them. For ease I will deal with Ms O’s concerns relating to each agreement separately. 2021 device agreement Ms O explained that the device acquired in 2021 developed a fault in 2025 and that she wanted to make use of her insurance policy and expected to receive a replacement device. As our Investigator pointed out, Tesco and the insurance provider are two separate businesses and so I can’t hold Tesco liable for how an insurance claim was handled. If Ms O would like to make a claim on her insurance, she will need to get in touch with her insurer to do so. However, Tesco is responsible for the quality of the device it supplied to Ms O. I haven’t seen any evidence to show the device was faulty, but I don’t doubt that it was. In order to say Tesco is liable for the fault and should either repair or replace the device, Ms O would need to show that the issue was either present or developing at the time Tesco supplied it to her, for example that it had a manufacturing defect, due to the length of time since the device was supplied to her. I haven’t seen that Ms O provided Tesco with evidence of this and as such I can’t fairly say that it is liable. Whilst I appreciate that Ms O was keen for the replacement device she feels she was promised, I can’t fairly direct Tesco to replace the device without evidence that it is liable for the issue. 2025 device agreement Ms O feels very strongly that when she called to query about her insurance policy she called Tesco and was fraudulently sold a new agreement, instead of being provided with the replacement device she says was promised to her and that she paid for. Tesco has said that it didn’t speak to Ms O on the telephone until after the agreement had been entered into and has provided evidence to show the agreement was taken out online. Whilst I appreciate Ms O’s strength of feeling, I haven’t seen any evidence to suggest that Ms O was speaking to Tesco when she entered into the 2025 device agreement. Ms O has described how shortly after she received the device, she started to receive calls from someone who said they needed to collect the device and she also explained that a

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different payment amount was taken from her account than what she agreed to. This seems to be consistent with other scams we’ve seen. In addition, a different email address was given when the agreement was taken out, than the one Ms O provided to this service, which explains why she did not receive any communication from Tesco and struggled to pass its security questions. Ms O has said that Tesco has confirmed she was the victim of a scam and I agree with her that it has, but it has not said that a Tesco employee scammed Ms O. It would be really unusual for a regulated financial firm to try and scam a consumer. And in the absence of any evidence to confirm that Ms O was in touch with Tesco when she took out the agreement, on balance I’m not persuaded she was, especially in light of the evidence Tesco has provided to show the agreement was taken out online and not on the telephone, as Ms O has described. It’s of course possible that Ms O was speaking to Tesco, but it seems more likely than not that she was speaking to someone impersonating Tesco and as such I can’t fairly hold Tesco responsible for anything that did or did not happen during that call. But regardless, Tesco has agreed to put Ms O in the position she would have been in had the issue not happened. Ms O has explained that when she called Tesco after she unknowingly entered into a new agreement, she was assured it wasn’t a scam. At that point in time, I don’t think Tesco had a reason to think Ms O had been scammed and so I don’t think it treated her unfairly by sharing this information. When Ms O called back and explained what had happened, Tesco acted promptly by allowing Ms O to return the device and agreeing to bring the agreement to an end. Tesco arranged collection of the device. I think this was fair and it’s what I would expect in these sorts of situations. Tesco offered Ms O some compensation and whilst I appreciate Ms O feels this was an admission of liability, I’m not persuaded that was the case given that I don’t think Tesco treated her unfairly at that stage. A few months later, Tesco sent a message to the number linked to the account advising of a missed payment, which prompted Ms O to get in touch. Tesco explained to Ms O that it had not received the device and there was an outstanding balance of close to £2,000.00 due. Tesco promptly investigated this and found out that the device had been lost in transit and so it made the decision to end the agreement, meaning Ms O didn’t have anything further to pay. I can appreciate that this would have caused Ms O significant upset, worry and embarrassment, however given that the device not being returned doesn’t appear to have been as a result of an error that Tesco made, I don’t think that Tesco acted unreasonably by not closing the agreement, or contacting the number it held on file regarding the arrears, when it didn’t receive the device. I also haven’t seen any persuasive evidence to show that any adverse information was recorded on Ms O’s credit file. Following this, Ms O had to make a lot of contact with Tesco and said she didn’t receive calls when she was promised them. I haven’t seen any evidence that prior to early-August 2025, Ms O asked Tesco to contact her using her telephone number, with a different provider, and so prior to then I don’t think it was unreasonable for Tesco to make contact with the number linked to the account. Whilst I can see that Tesco did try to reach Ms O on several occasions, it was unable to reach her. I can’t be sure it was calling the number Ms O had instructed Tesco to call, but it seems that Ms O was put to some inconvenience of having to call in an effort to resolve matters. Tesco has offered £75 in compensation and considering all that’s happened and how Tesco has dealt with the issues, I consider this to be a broadly fair way to resolve matters. I have a lot of empathy for Ms O, she has seemingly been a victim of a scam and feels that Tesco were involved in that. I can appreciate how upsetting and impactful the whole matter has been for her. For the reasons I’ve explained I’m not persuaded that Tesco were involved

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in the application for the 2025 device agreement, other than accepting an application it received. When it became clear what had happened, I’m satisfied that Tesco acted promptly to enable Ms O to exit the agreement and put her back in the position she would have been in, had the incident not happened. I don’t think it was unreasonable for Tesco to leave the agreement open until the device was returned and whilst I appreciate this led to some unwanted contact, I’m not persuaded that was unreasonable in the circumstances. Tesco investigated the issue surrounding the return and then promptly closed the agreement, which I think was fair in the circumstances. Whilst it seems that Tesco did not contact Ms O when it promised to, in line with her communication preferences, I consider the £75 compensation it offered to be a broadly fair way to resolve matters. It follows that I will not be asking Tesco to do anything more. My final decision My final decision is that I direct Tesco Mobile Limited trading as Tesco Mobile, to pay Ms O £75 compensation. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms O to accept or reject my decision before 24 April 2026. Daniella Roberts Ombudsman

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