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Mis-sold Mobile Phone Insurance

 Were you mis-sold Mobile Phone Insurance? 

The Financial Conduct Authority (FCA) has fined The Carphone Warehouse £29,107,600 for failings that led to the mis-selling of ’Geek Squad’, a mobile phone insurance and technical support product. This follows an FCA investigation which stemmed from whistle-blowing reports.

The FCA found The Carphone Warehouse failed to give its sales consultants the right training to give suitable advice to customers purchasing Geek Squad. In particular, sales consultants were not trained adequately to assess a customer’s needs to determine whether Geek Squad was suitable. They were trained to recommend Geek Squad to customers who already had cover, for example through their home insurance or bank accounts.

During the period under investigation (1 December 2008 to 30 June 2015), The Carphone Warehouse made regulated sales of Geek Squad policies worth over £444.7 million. A high proportion of these policies were subsequently cancelled early. For example, in January 2014, 35% of policies were cancelled within the first 3 months from inception. High cancellation rates are an indicator of a risk of mis-selling which The Carphone Warehouse failed to properly consider.

Mark Steward, executive director of Enforcement and Market Oversight at the FCA, said:

‘The Carphone Warehouse and its staff persuaded customers to purchase the Geek Squad product which in some cases had little to no value because the customer already had insurance cover. The high-level of cancellations should have been a clear indicator to the management of mis-selling.’

‘Without whistle-blowers coming forward these practices may never have come to light. In the past few years, whistle-blowers have contributed critical intelligence to the enforcement actions we have taken against firms and individuals.’

The Carphone Warehouse sales staff were trained in ‘spin selling’, where the focus was on persuading customers to purchase Geek Squad and on selling the features of the product. No training was provided on how to respond when customers gave answers indicating the policy may not be appropriate. Sales staff were trained in ’objection handling’, with the focus being on overcoming customer objections rather than assessing whether the product was suitable for the customer. Customers who said they might have a similar product or wanted to think about it were advised to purchase Geek Squad and cancel in 14 days. This created a risk that customers would purchase insurance that they did not need and would be exposed to the risk of paying for it if they did not cancel in time.

When customers complained about the sale of Geek Squad, The Carphone Warehouse failed to properly investigate and fairly consider their complaints. This resulted in valid complaints not being upheld in circumstances where the product had been mis-sold. As a result, management did not have an accurate impression of indicators of mis-selling.

The FCA therefore found that The Carphone Warehouse breached Principle 3, Principle 6 and Principle 9 of the FCA’s Principles for Businesses between 1 December 2008 and 30 June 2015.

The firm did not dispute the FCA’s findings and exercised its right, under the FCA’s partly contested case process, to ask the FCA’s Regulatory Decisions Committee to assess the appropriate level of sanction. The firm’s agreement to accept the FCA’s findings meant it qualified for a 30% discount. Otherwise, the FCA would have imposed a financial penalty of £41,582,300.

Read further  https://www.fca.org.uk/publication/final-notices/the-carphone-warehouse-limited-final-notice-2019.pdf

Benefits of using Barings Solicitors!

- The Carphone Warehouse will not be able to ignore us.

- We take care of all communication and paperwork for you.

- You save time.

- We offer you a No Win, No Fee so you don’t pay anything if you’re claim isn’t successful.

- We have years of experience in financial claims.

- Please note that Barings Solicitors DO NOT work for the Carphone Warehouse and are not affiliated with the Carphone Warehouse.We help our clients to make mis-sold insurance claims against the Carphone Warehouse.

How do I claim?

Barings Solicitors can provide you with specialist advice and will deal with the claims process from start to finish, relieving you from the stress of making a claim on your own.

We work on a no win, no fee basis, so we only charge if we are successful in recovering your compensation.

To get started with your claim, get in touch today by calling our team on 0161 200 9960.

Please remember you can always choose to claim directly to the Carphone Warehouse without using our service.




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