DIXONS Carphone Warehouse has been fined £29.1million by the city watchdog for mis-selling “Geek Squad” phone insurance policy.
The policy, which also offered technical support, was offered as an add-on to customers’ phone contracts even if they didn’t need it.
The investigation by the Financial Conduct Authority (FCA) found that the sales team were being trained to push the policy onto customers even if they were already protected through their home insurance or bank accounts.
The FCA told The Sun that the mobile firm is offering “voluntary” compensation to customers and that some who have complained have already received a payout.
The policies were mis-sold between December 2008 and June 2015.
The firm sold £444.7million worth of policies between December 2008 and June 2015 and a “very large number” of them were sold to those who didn’t need it.
How do I contact Carphone Warehouse for compensation?
CUSTOMERS who feel that they were mis-sold the Geek Squad insurance policy are being told to get in touch with Carphone Warehouse directly.
The FCA hasn’t ordered the mobile phone company to hand out compensation but that it is offering payouts on a “voluntary basis”.
If you think you are owed compensation, you should get in touch with the firm and explain why you think you were mis-sold the policy.
You will need to provide information like when you took out the policy, if and when you cancelled it and details of other insurance policies that you already had that protected your phone.
Here’s how to contact the firm:
- Phone: 0800 049 6190
- Post: Geek Squad, PO Box 358, Southampton, SO30 2PJ
- Online: www.geeksquad.co.uk/contact/complaints)
The watchdog found that staff were trained in “spin selling” and “objection handling” where the focus on pushing the product, even if the customers indicated that they were covered elsewhere.
They were also told to urge customers who weren’t sure to take out the policy anyway and cancel it within 14 days.
The company also failed to deal with customers complaints fairly.
The FCA was alerted to the scandal by whistleblowers, who highlighted that a high proportion of the policies were cancelled early – around 35 per cent of them were terminated within three months of taking them out.
The FCA this was a typical indication of something that has been pushed onto customers even though it’s not needed.
Now, customers who think they were wrongly sold Geek Squad are being urged to contact Carphone Warehouse directly because they may be entitled to a payout.
Mark Steward from 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 whistleblowers coming forward, these practices may never have come to light. In the past few years, whistleblowers have contributed critical intelligence to the enforcement actions we have taken against firms and individuals.”
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Alex Baldock, group chief executive at Carphone Warehouse told The Sun: “We’re obviously disappointed that Carphone Warehouse fell short in the past.
“But we’re a very different business today, as the FCA acknowledges, we’ve made significant improvements since 2015.
“We’re committed to stay on that trajectory, and to make sure all customers enjoy the right technology products and services for them.”
It’s the second fine that has been slapped on the company – in January last year, it was issued a £400,000 penalty for a data breach that affected three million customers.
Also last year, Carphone Warehouse announced that it would be closing 100 stores as it struggled to adapt to “changing consumer habits”.
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