back to article Carphone Warehouse fined £29m for mis-selling mobile insurance to punters who didn't need it

Misfiring UK mobile phone dealer The Carphone Warehouse was today slapped with a £29.1m penalty by the Financial Conduct Authority for "mis-selling" handset insurance over a six-and-a-half year period. The dodgy practices came to light following whistleblower reports that prompted the FCA to probe the company between 1 …

  1. Flak

    Now re-pay the premiums for all people who have been scammed

    A fine is 'fine', but in order to fully feel the pain and stop these kinds of things happening, the people who have actually been harmed through this process should be refunded.

    Like PPI, but automatically, without the claims management companies getting involved in the next feeding frenzy.

    1. Anonymous Coward
      Anonymous Coward

      Re: Now re-pay the premiums for all people who have been scammed

      ...and perhaps the authorities responsible for investigating this kind of thing could be a bit more proactive.

      In the case of the banks those of us who were smart enough to avoid PPI are losing out as the banks shell out compensation etc. If the authorities had stopped them doing this before it got out of control a lot of money could have been saved.... plus all those annoying ads and cold calls.....

  2. djstardust Silver badge

    Apparently

    According to a spokesman "it's a different company now"

    Not according to a good friend who worked there very recently and left after 6 months.

    Main reasons:

    Pressure from managers to up sell handsets whether the customer needed a high spec model or not (specifically Samsung for the commission)

    Told to lie about the benefits of the phone insurance to get the store figures up (gets the area manager a bonus)

    Had to use every excuse for the customer not to buy sim only (contracts also get management a bonus)

    Above that, the payroll was a mess and not once was his pay correct at the end of the month.

    He's worked in retail for nearly 20 years and said this was the worst company buy a country mile.

    so what's new pussycat?

    1. Hans Neeson-Bumpsadese Silver badge

      Re: Apparently

      According to a spokesman "it's a different company now"

      Not according to a good friend who worked there very recently and left after 6 months.

      And not according to my recent experience. A couple of weeks ago I went into the local branch of PC Dixons Curry World * for something

      I failed to find the cable I needed on the shelf at the Carphone Warehouse area of the store, so asked a member of staff. He said that there was probably one in the PC World bit of the store but I'd have to ask them myself as it's a different entity - he wasn't even prepared to walk me over to show me where I might find it, nor was he prepared to speak to any of the staff on that side of the store

      * yes, I know...I didn't like the idea either, but I needed a cable in a hurry and was desperate.

      1. Anonymous Coward
        Anonymous Coward

        Re: Apparently

        > PC Dixons Curry World

        Isn't that the Indian takeaway that Dixon of Dock Green ran briefly after he retired from the force?

      2. TechnicalBen Silver badge
        Facepalm

        Re: Apparently

        Same experience with headphones. The ones on display were sold out, showing "on sale" for an amazing price and sound quality. But no info on them (turns out end of line, but other companies already have the new models in). Lower specced model in stock, but obvs lower end line. Most of them were broken or not actually stocked.

        They were helpful in telling me they could order in one for next day collection/delivery, but I don't know how, as online it showed "out of stock".

        So in the end, we got the "newer" (only a slight external visual revision AFAIK) model elsewhere, my bro same day delivery, me I got some a week later at another store.

        I was literally ready to give them my cash, but no real help (I know I can buy them online :rolleyes:).

    2. katrinab Silver badge
      Flame

      Re: Apparently

      'According to a spokesman "it's a different company now"'

      It is now Dixons Retail Group aka Currys PC World. A company known for its very enthusiastic selling of Coverplans.

      Like for example a £15 Coverplan on a £20 toaster. If a £20 toaster breaks, you don't think about whether or not you have an insurance policy you can claim on, you throw it in the bin and get a new one.

      1. Loyal Commenter Silver badge

        Re: Apparently

        Like for example a £15 Coverplan on a £20 toaster. If a £20 toaster breaks, you don't think about whether or not you have an insurance policy you can claim on, you throw it in the bin and get a new one.

        Not to mention that the plan almost certainly is a "3 year plan" - i.e. the 2 years statutory period you'd get anyway plus one year's actual insurance.

        I don't know about you, but the toaster I have was bought in 1995 and still works fine, nearly a quarter of a century later - I dread to thnk how many multiples of its original price (probably around £10) it would have cost me to insure it for that period of time.

        Pretty much all insuracne is a bet against bad luck, and with all betting, in the long run the house always wins. It only make sense to insure something if you can't afford to replace it, and would be genuinely stuck without it, or if having third-party insurance is a statutory requirement, as with a car.

        1. katrinab Silver badge

          Re: Apparently

          I changed mine about 6 years ago because I moved from a rented house to one that I bought, and I wanted one in a different colour that matched the kitchen decor and other appliances.

          I also replaced the microwave for one that has a combination oven/grill, and I actually use that a lot more than the microwave function. Works exactly the same, put it on for the appropriate number of minutes and it beeps when it’s done, but for a higher number of minutes. That cost me about £70 in Sainsburys, who didn’t try to sell me insurance.

          The kettle, I’ve had for about 15 years, still works but it does look its age, and I’ll probably replace at some point.

          1. Is It Me

            Re: Apparently

            You obviously don't live in a hard water area, if you do the best advice is to treat kettles as disposable items.

            1. Loyal Commenter Silver badge

              Re: Apparently

              You can get one of those metal ball things that bounces around inside and dislodges the limescale. Of course, after a while, what you end up with is a solid ball of reinforced calcite, but replacing that is cleaper than replacing the kettle.

      2. Just Enough
        Alert

        Re: Apparently

        "you throw it in the bin and get a new one."

        Recycle it!

  3. tiggity Silver badge

    Still the same

    Lots of pressure to look at a more expensive phone (even though partner knew what phone spec they wanted), continually slipping insurance into conversation when partner and I were in there a while ago (visiting several bricks & mortar shops to see if any better than online deals on offer). Needless to say they lost any hope of a potential sale by being too busy trying to upsell instead of just detailing best offer they could give on precise phone spec partner required.

    1. Andy Non

      Re: Still the same

      I had the opposite experience. The guy wasn't the least bit interested in selling me a phone or giving me any information; it was like trying to get blood out of a stone. It must have been time for his lunch break. Needless to say I bought elsewhere.

  4. Voyna i Mor Silver badge

    PC world

    They did the same - tried to sell me insurance.

    "I have it on my home insurance"

    I had to repeat this at least 4 times as the sales clerk repeatedly tried to get me to take out their insurance.

    1. Doctor Syntax Silver badge

      Re: PC world

      Maybe you just don't have the right disbelieving face. I don't usually buy anything there but when I did the whole attempt was made in a tone of voice which carried no conviction and petered out part way through. I can't remember if he actually started off with "I don't suppose..." but it was the impression given. Or maybe he was used to dealing with customers who knew their own minds; he was, after all, in a shop in Yorkshire.

      1. 0laf Silver badge
        Childcatcher

        Re: PC world

        I suspect I have a very good 'fuck off' face. It's a very rare occasion anyone tried to upsell me anything.

        I think I maybe just have a general demeanor of misanthropy.

        1. Anonymous Coward
          Anonymous Coward

          Re: PC world

          I know who you are.

          I know what you are doing.

          And I use to do your job [at least a proxy of it].

          Those are usually the best 3 answers I can give!

    2. Anonymous Coward
      Anonymous Coward

      Re: PC world

      My stock response is along the lines of "No. I'm banned from taking out insurance as I have a long history of committing insurance fraud. If you sell me an insurance product then you'll be aiding and abetting an offence"

      1. Locky Silver badge
        Pint

        Re: PC world

        I like this response more than I probably should. Have one of these ->

  5. Anonymous Coward
    Anonymous Coward

    I didn't have much trouble with Carphone warehouse when I bought a phone there 3 or 4 years ago. I was picking up a landfill android PAYG mobile for £15, and the guy behind the counter said "Can I interest you in an insurance policy for your phone, it will cost, er, the price of your handset..." and then gave up trying to sell it to me.

    :-)

  6. Doctor Syntax Silver badge

    "accepted that in the past the company's practices fell short"

    Sir Humphrey's excuse number 5.

  7. confused and dazed

    is this a surprise ?

    But surely this has been going on since the first high street shop started selling mobiles. It's the tech equivalent of buying a can of shoe spray after you've bought your new flip flops. I was offered a warranty on batteries at a well know catalogue shop recently..... folk need to take some responsibility for their behaviour and just avoid theses sellers.

    1. Doctor Syntax Silver badge

      Re: is this a surprise ?

      "But surely this has been going on since the first high street shop started selling mobiles."

      Much longer than that.

  8. Hans Neeson-Bumpsadese Silver badge

    It always used to wind me up when they did the hard sell on the product insurance...like I was almost certainly going to need it.

    Look, if I'm paying for a product I'm going to take care of it. If you're telling me that it could break just from the wear & tear of everyday use, then I'm seriously starting to doubt whether the product is any good. Maybe I'll just not buying it at all if it's so f***ing fragile.

    1. Bonzo_red

      The same goes for extended warranties. If the cost reflects the expected failure rate, they must be selling a really shit product.

  9. Anonymous Coward
    Anonymous Coward

    Presumably this sort of thing is partly to blame for the trend in people avoiding these sorts of places now?

  10. Andy Non

    Persistent buggers

    I can see how some people get sucked into buying insurance and extended warranties but they quickly realise they don't have a hope in hell with me. After telling them firmly I'm not interested two or three times they give up. I don't care if I seem abrupt or hurt their delicate feelings by saying no.

    Personally I take the view that the only things you should insure are those you can't afford to replace (house and contents) or that you are legally obliged to insure like a car. In the long run it is cheaper to bite the bullet any pay yourself if things break early or are lost / stolen. Insurance companies aren't charities, they exist to make a profit which means they take more money in premiums than they pay out in claims. By NOT paying insurance for a whole host of goods and appliances it works out much cheaper in the long run - unless you are a clumsy bugger and keep breaking and losing stuff.

    1. Thunderpants
      Pint

      Re: Persistent buggers

      "unless you are a clumsy bugger and keep breaking and losing stuff."

      ... when your insurance premiums probably get so high that it's worth just replacing the thing yourself anyway :)

    2. TechnicalBen Silver badge
      Facepalm

      Re: Not "suckered".

      I know of a few people who will say yes, then cancel at home, just because they don't like confrontation/making people sad.

      LOL when the salesperson does see the paycheck, still sad, and still confrontational.

      But some people just cannot give an honest "no, get lost" answer. :/

    3. Doctor Syntax Silver badge

      Re: Persistent buggers

      "they take more money in premiums than they pay out in claims"

      And commissions. Don't forget the commissions. Dixons don't.

    4. katrinab Silver badge

      Re: Persistent buggers

      Only insure things that are expensive and unlikely to happen.

      If it is likely to happen, then put money aside for it, just like you would for eg your holiday.

    5. eldakka Silver badge

      Re: Persistent buggers

      Personally I take the view that the only things you should insure are those you can't afford to replace (house and contents) or that you are legally obliged to insure like a car. In the long run it is cheaper to bite the bullet any pay yourself if things break early or are lost / stolen.

      Since a few years ago, every time a salesman asked me about extended warranties and/or insurance, I've put that money aside into a separate bank account and declined the offer.

      Every time something broke outside its warranty period that I had put that money aside for, I've been able to replace it with the money in that account and still have a couple thousand left over sitting in it after the 4 or so years I've been doing that.

      This does not apply to really expensive things, like cars or houses tho. Just to things like whitegoods, home entertainment (err, I mean TVs and stereos, not other types of in-home entertainment), computers, phones, household appliances, etc.

  11. TseTT
    Mushroom

    Other side of the insurance thing..

    I bought a microwave oven when they sort of first came out in Blighty. I had spent so much money on it, I accepted the extended warranty offer covering the next four years.

    Almost a day after the original 12 month guarantee expired, it failed..

    It turned out to be a very expensive bit, but was now luckily covered by the extended warranty.

    So it turned out to be money well spent, as I bought it in 1986 and I'm still using it!

    1. Scunner

      Re: Other side of the insurance thing..

      A 1986 vintage microwave oven? Do birds spontanously drop out of the sky into your garden every time you reheat a cuppa?

      1. Anonymous Coward
        Anonymous Coward

        Re: Other side of the insurance thing..

        >Do birds spontaneously drop out of the sky into your garden every time you reheat a cuppa?

        And everyone's broadband and mobile signal in a mile radius ?

  12. Anonymous Coward
    Anonymous Coward

    Scumbags at DRG also insist on opting you in to marketing.

    Bought a camera (flaring off a gift voucher). Told 'em at the time no follow-up marketing and observed to the droid that they were not supposed to opt in by default any more. So I then get a couple if emails telling me that DRG can offer a few odds and ends "to help me get the most from my purchase" then a letter offering me insurance.

    I feel a whinge to the ICO coming on.

    1. Korev Silver badge

      That's why I use a domain:

      $SHOP Droid: Can I have your email address

      Korev: $SHOP@$DOMAIN.com

      $SHOP Droid: You have a dedicated email address just for us

      Korev: No, but it means I can see if you sell my address

      $SHOP Droid: <Looks either confused or sheepish>

      1. Anonymous Coward
        Anonymous Coward

        Gmail lets you add useful tags to your email Addy. Try summat like

        name.name+drg@gmail.com

        Or maybe +scumbag

      2. smudge Silver badge

        That's why I use a domain:

        Same here. Have done that since day 1 - about 25 years ago - when I first signed up with Demon. They let you choose a subdomain name so you could have <anything>@<yourname>.demon.co.uk, with as many different things as you liked before the @.

        When I had to move away from Demon, I simply registered my own domain, so I am continuing the practice.

        Interestingly, in all that time, having used hundreds of different email addresses, I have only seen 4 or 5 being misused. Whether they were hacked, or sold or taken by the classic disgruntled employee, I have no way of knowing. But it's a much smaller number than I was expecting.

        And yes, the bemusement when a droid registers that I have an address with their employer's name in it is usually quite amusing.

  13. Anonymous Coward
    Anonymous Coward

    Worked there about 3 years ago, at that point it was still the same:

    Arm twist customers to purchase insurance when they already had it... to cancel if they discover their current insurance has equal cover.

    Offer cashback to sub the first months payment upfront.

    'Sell the benefits' of the insurance by suggesting customers sell their handset abroad and claim it has been stolen..

    Repeatedly had customers returning asking 'what is that geek squad thing coming out of my bank?'.

    Gaming of credit checks to pass foreigners on holiday for contracts.

    Seen it all...

    1. Anonymous Coward
      Anonymous Coward

      'Sell the benefits' of the insurance by suggesting customers sell their handset abroad and claim it has been stolen..

      If you saw that happen and didn't whistleblow, then shame on you

      1. Anonymous Coward
        Anonymous Coward

        Whistle blow?

        Walk into any store with such products and bigger than a mom and pop shop.

        It happens, you just make sure only middle management ever "knows" and you have plausible deniability.

        Thus any company out there is doing it, and some do get caught, just look up a newspaper for the current slap on the wrist "don't do it again naughty boy" and "oh, we fired that one single person we promise was doing it and no one else".

        You cannot whistle blow, when society has decided to cover their ears.

  14. Anonymous Coward
    Anonymous Coward

    Same shit practised by Dixons and their extended warranties before they merged, two companies that thoroughly deserved each other.

  15. Lee D Silver badge

    The time in my life when I've ever felt most angry was not in a Carphone Warehouse, but it was for similar reasons to such upselling.

    A relative pre-booked a hire car at Heathrow airport from one of the big rental companies. We picked them up at the airport, ferried them to the company's base (waiting for a bus would have taken forever), and stood with them to get their (pre-booked) hire car.

    The guy there was the rudest guy I have ever met in my life (and I've met some really rude people, and would count myself among those people who people might rate as rude).

    My girlfriend had booked and paid for the car online, because her relatives didn't speak English or have an English credit card. They all had EU driving licences. I was just the chauffeur to get them to the place so they could get the car and follow me down to Cornwall.

    First the guy got into massive upsell mode. For everything. He took no hints, and constantly talked over us. We've paid, mate. Literally, we chose the car, know what we want, have a reservation, have paid for it, even typed in all the licence info. We'd just like the car.

    Then he got beyond-shirty to almost aggressive. The beautiful thing was that he was supposed to be training an apprentice just behind him. The apprentice's face was an absolute picture for the entire interaction. I actually wondered whether he'd "bet" them that he could upsell us and was so frustrated when he couldn't. Literally the guy would ask about "Do you want to pay a deposit for the petrol usage and then you don't have to worry about returning the vehicle with a full tank?" The foreigners can't answer, the girlfriend can barely translate anything in time, and he's just not stopping talking to allow her to do so. So I say "No thanks, mate, we'd just like the car". He literally yelled at me.

    Do we want extra-damage insurance (our paperwork from the website clearly shows we ticked no)? Do we want to set up an account? (for people visiting the UK for the very first time? No) Do we want to pay for a valet afterwards? And each time the guy doesn't want *me*, the only native English speaker, to speak - despite the fact that EVERY answer I give matches up with the eventual-translated answer. And he just doesn't understand "We'd just like the car, we have to be somewhere, and we've answered all these things for our booking already".

    At one point, I leaned to my girlfriend and whispered "This guy..." and he asked me to leave. The apprentice's (and probably my own) face was utter disbelief at that point. Fortunately, my girlfriend had half a brain and said "If he leaves, we all leave, there's no way I'm not going to deal with you on our own." Nobody has ever infuriated me, before or since, to the point that my hands start shaking and my jaw clenches from the restraint not to give him an earful.

    He got no extras. He got a complaint filed against him. My girlfriend and I knew that if we weren't absolutely reliant on getting a car that we'd already paid for, and quickly get down to Cornwall that same day, he'd have been on the receiving end of much worse than a bit of "We're not interested" and "No thanks".

    Even the foreigners were kind of "What the hell is this guy's problem?" and they didn't even speak the language.

    Honestly never been so infuriated in all my life. That one guy and his blinkered upsell cost that company more than he could ever make by doing so.

    1. Loyal Commenter Silver badge

      Car hire guys always try to upsell you on the insurance - the hire policy will have a huge excess on damage, often requiring a pre-authorisation on a credit card if you don't take their (expensive) accident insurance, often enarly as expensive as the hire itself. They really don't like it if you show them the policy documents for the car-hire excess insurance you've taken out for a fiver.

      1. Anonymous Coward
        Anonymous Coward

        They really don't like it if you show them the policy documents for the car-hire excess insurance you've taken out

        And at least one (Greenmotion, I think) has a cheap headline price, and small print in the online contract which requires you to take their own insurance at 10GBP/day, and says that they'll refuse to rent the car if you don't.

        1. eldakka Silver badge
          WTF?

          And at least one (Greenmotion, I think) has a cheap headline price, and small print in the online contract which requires you to take their own insurance at 10GBP/day, and says that they'll refuse to rent the car if you don't.

          Don't know about the UK, but in Australia that'd be illegal. An advertised/listed/displayed/quoted price must include any and all compulsory components to a purchase. If you must pay 10GBP/day or you can't have it, that 10GBP would have to be included in the advertised price.

  16. Irongut
    Holmes

    Not surprised. Carphone Warehouse have been on my list of scumbags that operate illegally and will get none of my business ever since they committed identity theft on me some 10 - 12 years ago. Amusingly the one thing I did eventually get out of that debacle was a double refund on the insurance I'd taken out lol.

  17. Allan 1

    TescoMobile are just as bad. 2 years ago I got a new Samsung S7, told the guy repeatedly that I did not want their insurance as iI had full gadget cover through my bank. He kept on and on and on. When I finally got home, and went through the paperwork... He had signed me up to their insurance anyway, forcing me to battle customer relations to cancel it (they really didn't want to cancel it).

  18. Shugyosha

    I wonder how this aligns with the values of the Carphone Warehouse?

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