Carphone Warehouse fined £29m for mis-selling Geek Squad phone insurance

Doris Richards
March 15, 2019

Carphone Warehouse has been fined £29.1m by the City watchdog for mis-selling Geek Squad, a mobile phone insurance and technical support product.

The regulator said that Carphone Warehouse, which is part of the merged Dixons Carphone retailer, had failed to provide its sales consultants with the right training to give suitable advice to customers purchasing Geek Squad mobile phone insurance.

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.

Geek Squad offers insurance for phones and tablets, device repairs and support helplines for customers in the United Kingdom, and was also operates as a subsidiary of American electronics chain Best Buy in the US, Netherlands, Puerto Rico and Canada.

Mark Steward, executive director of enforcement and market oversight at the FCA, said the Geek Squad product had been found on occasion to have "little to no value because the customer already had insurance cover".

The watchdog said 35% of insurance policies were cancelled in the first three months, an indicator of mis-selling.

The dodgy practices came to light following whistleblower reports that prompted the FCA to probe the company between 1 December 2008 and 30 June 2015, before Dixons bought the comms retailer.

"We're obviously disappointed that Carphone Warehouse 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. "As a result, management did not have an accurate impression of indicators of mis-selling".

The FCA said: "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".

A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017.

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 ). Without it they would have been fined more than £41 million.

Other reports by Iphone Fresh

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