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Tesco compensation scheme - how those affected can claim

Investors that purchased Tesco PLC shares between 29 August 2014 and 19 September 2014 could be entitled to compensation of 24.5p per share plus interest of 4%.

Around 10,000 investors are expected to eligible for compensation. Hargreaves Lansdown clients could receive an average of £400 each.

Hargreaves Lansdown is able to make the claim on our clients’ behalf. We will contact those we believe are eligible to claim with further information. Alternatively, investors can claim directly with KPMG.

Below we explain why certain Tesco investors are eligible for compensation and how people can claim through Hargreaves Lansdown or directly with KPMG. We have also included a number of frequently asked questions.

Why is Tesco paying compensation?

On 29 August 2014, Tesco PLC and Tesco Stores Limited issued a trading update about its expected first half 2014/15 profit.

That announcement was inaccurate and Tesco issued a corrective statement on 22 September 2014. As a result, the Financial Conduct Authority (FCA) has decided that Tesco should pay compensation to net purchasers (purchases less sales during the period) of Tesco shares and bonds in the period from 29 August to 19 September 2014 inclusive, who may have overpaid because of the inaccurate market announcement.

Claiming compensation through Hargreaves Lansdown - act by 13 July

Hargreaves Lansdown has designed a simplified claims process. This process will avoid you having to submit all your details and evidence of your Tesco share transactions directly to KPMG. There is no charge for this service and you’ll receive exactly the same amount of compensation.

In order to use this more streamlined process we require your approval to allow us to share some of your details with KPMG. Clients wishing us to assist with their claim, must supply their authorisation to us by noon on Thursday 13 July 2017. The details we will need to share with KPMG are:

  1. Your name
  2. Your address
  3. Your mobile telephone number

This data would be shared with them securely.

Your mobile telephone number is needed so KPMG can send you a verification pass code so you can log into the claims website when that goes live. Your mobile number will not be used for any other purpose. If you do not have a mobile telephone number certain landline telephone providers (including BT) have a service where text messages can be received as calls through the landline. You therefore may provide a landline telephone number instead.

If you would like us to help you make your claim you will need to:

  • Log into your Hargreaves Lansdown account
  • Select the ISA or Fund and Share Account where the affected Tesco shares were held
  • You will see a new holding called "Tesco Compensation Scheme"
  • Click on the blue icon to the right of this and follow the on screen instructions.

N.B. If you have more than one holding of Tesco Compensation Entitlements, for example in an ISA and Fund and Share Account, you need only give one instruction authorising us to make the compensation claim on your behalf in respect of all net purchased shares in your Hargreaves Lansdown accounts.

You will be asked to input your mobile phone number and confirm your address details. By completing these details you will be asking Hargreaves Lansdown to organise your compensation claim and you will not be able to make a claim separately.

KPMG will send you a letter with your login details for the claims website. This letter will also explain the steps you need to take to complete the claims process. The claims website will go live in early August and when it has, you will receive a text message with a verification code for you to use when logging in.

How ISA and SIPP holdings are treated differently

Compensation in respect of shares held within ISA can be paid back into the ISA without the amount counting toward the annual ISA allowance.

In the case of HL SIPP investments, claims are being made in bulk by the pension trustees. No action is needed by the investor and we will notify clients once the payment has been received. Compensation will be paid directly back into the SIPP and will not be treated as a contribution. This means the payment will not benefit from tax relief but also not count towards normal annual allowance entitlements.

How to claim directly with KPMG

Investors can choose to claim compensation direct from the Administrator of the scheme, KPMG.

  1. Investors need to supply their personal details and evidence of Tesco share transactions to the administrators KPMG
  2. They then receive log in details for a claims website from KPMG
  3. Investors upload evidence of their identity for anti-money laundering purposes onto the claims website
  4. Then download the discharge form from the claims website, sign and then upload onto the claims website
  5. The compensation claim will be processed and then paid in 35 days

Please note that if you have bought shares through more than one broker you will only be able to claim direct with the administrators KPMG.

You may need to contact your other broker(s) in respect of any other Tesco share purchases or you will need to apply direct to KPMG for compensation.

FAQs

You will receive the same amount if you claim direct or through Hargreaves Lansdown.

This article is not personal advice. If you are unsure of a course of action for your circumstances please seek advice. Money in a pension can’t be accessed until age 55 (rising to 57 from 2028). Tax rules can change and benefits depend on circumstances.