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

Alfred Osborne
March 15, 2019

"We're committed to stay on that trajectory and to make sure all customers enjoy the right technology products and services for them".

The watchdog carried out an investigation after being alerted by whistleblowers - without whom "these practices may never have come to light".

Alex Baldock, Carphone Warehouse chief executive, said: "As the FCA acknowledges, we've made significant improvements since 2015".

Staff were trained to recommend Geek Squad insurance cover to customers who were already covered under their home insurance or bank account policies.

Carphone Warehouse were found to have not given sales consultants enough training to tell whether customers were suitable for Geek Squad.

The firm's boss said it was "disappointed"; it had fallen short in the past but it ios "a verfy different business today".

Mark Steward, executive director of enforcement and market oversight.

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The investigation into the selling processes of Geek Squad was between December 2008 and June 2015 and the FCA imposed a discounted fine as Dixons had accepted the regulator's findings, the regulator and the company said in separate statements. 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.

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 "high proportion" of the policies sold to clients were subsequently cancelled early. The financial watchdog noted: "For example, in January 2014, 35 per cent of policies were cancelled within the first three months from inception".

Dixons Carphone Plc (LON:DC.) shares edged lower on Wednesday morning after the high street retailer was slapped with a £29.1mln fine for mis-selling mobile phone insurance.

When customers complained, the company failed to properly investigate and fairly consider their complaints, the watchdog added. This resulted in valid complaints not being upheld in circumstances where the product had been mis-sold.

The penalty comes after parent firm Dixons Carphone revealed a year ago it had suffered a massive data breach affecting the records of millions of its customers.

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