Carphone Warehouse fined £29m for insurance mis-selling

FCA fines Dixons Carphone for mis-selling Geek Squad phone insurance

Carphone Warehouse fined £29m for insurance mis-selling

"The high-level of cancellations should have been a clear indicator to the management of mis-selling".

The Financial Conduct Authority (FCA) has fined Carphone Warehouse £29 million for mis-selling mobile phone insurance.

The FTSE 250 company acknowledged that its practices had fallen short in the past.

In a statement, parent company Dixons Carphone said that it had worked closely with the FCA during the investigation and accepts that its practices "fell short" in the past.

However, it said the FCA acknowledges that Carphone Warehouse has made "significant improvements" since 2015, and has carried out two customer redress programmes. We're committed to stay on that trajectory, and to make sure all customers enjoy the right technology products and services for them, ' said Alex Baldock, Group Chief Executive.

The FCA found that The Carphone Warehouse had failed to give its staff the right training to give suitable advice to customers purchasing the product named "Geek Squad".

The FCA said sales staff at Carphone Warehouse were trained in "spin selling", which focuses on persuading customers to purchase the product with no training provided on how to respond if customers said the policy may not be appropriate. Created to recommend Geek Squad to customers who already had insurance either on their home policy or via their bank. For example, in January 2014, 35% of policies were cancelled within the first three months from inception.

In fact, customers who potentially had similar coverage were still advised to take out the firm's mobile phone insurance, with staff trained to "overcome" objections instead of assessing the client's need for the policy.

The FCA say customers who think that they may have been mis-sold Geek Squad should contact the firm directly (by telephone: 0800 049 6190, by post: Geek Squad, PO Box 358, Southampton, SO30 2PJ or on-line www.geeksquad.co.uk/contact/complaints ).

Complaints from customers were not adequately followed up by Carphone Warehouse, meaning valid complaints were not upheld.

The Carphone Warehouse accepted the watchdog's findings and settled the fine early, getting a 30 per cent discount from the original £41.58m fine it was issued with. It was the biggest penalty it has imposed on a retailer.

Latest News