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Carphone Warehouse fined £29m for insurance mis-selling: can you claim?

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Carphone Warehouse has been fined £29m by the regulator for mis-selling “Geek Squad”, a mobile phone insurance and technical support product.

The fine follows an investigation by the Financial Conduct Authority (FCA) which stemmed from whistleblowing reports.

The FCA probe found that Carphone Warehouse staff did not have suitable training to advise customers purchasing Geek Squad.

Sales staff were trained in “spin selling”, where the focus is on persuading customers to purchase Geek Squad and on selling the features of the product.

The FCA said Carphone Warehouse failed to properly investigate customer complaints.

The company made £444.7m from selling Geek Squad policies between 1 December 2008 and 30 June 2015 – the period under review.

A high proportion of policies were cancelled early. For example, in January 2014, 35% of policies were cancelled within the first three months from inception.

High cancellation rates are an indicator of a risk of mis-selling, the FCA said.

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.”

In a statement, the company admitted past practices “fell short” but that it had “made significant improvements” since 2015.

Alex Baldock, group chief executive, said: “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.”

Are you due compensation?

Carphone Warehouse has already carried out two customer redress programmes, covering complaints and cancellations.

Customers who think they were 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

If they are not content with the firm’s response, they can refer the matter to the Financial Ombudsman Service.

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