The UK Financial Conduct Authority (FCA) has fined Carphone Warehouse just over GBP 29 million for insurance mis-selling.
The company was fined for failings that led to its 'Geek Squad' mobile phone insurance and technical support product being mis-sold. The investigation found that Carphone Warehouse failed to provide the right training to sales consultants to allow them to offer suitable advice to customers buying the Geek Squad product. Specifically, sales consultants were not adequately trained to assess customers' needs to determine if the product was suitable, and sold policies to customers who were already covered through home insurance or bank accounts.
Carphone Warehouse made regulated Geek Squad policy sales worth more than GBP 444.7 million during the period under investigation (01 December 2008 to 30 June 2015). A high proportion of these policies were cancelled early, with high cancellation rates an indicator of mis-selling.
The company did not dispute the FCA's findings and as a result qualified for a 30 percent discount. Otherwise, the FCA would have imposed a fine of GBP 41.50 million. 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. It insisted that it has introduced more comprehensive customer-needs assessment since 2015, as well as improved staff training and compliance monitoring. It has also invested in customer service and post-sale customer satisfaction.
