Finally! A retailer with some back bone! Well Done Tesco's!
This is the message they have sent me today:

'Hi Tara,

Thank you for taking the time to make us aware of this.

To call us a merchant of theirs however could be deemed misleading – as we are not a merchant but an issuer of Tesco gift cards in the relationship.

This will be picked up with them and we'll request that they stop referring to Tesco in that way.

Thanks
Cassandra - Customer Care'

Cashback World are doing this to ALL the National Retailers and it's FRAUD. 100%! Let's hope others follow