15 Mar 2019
The Financial Conduct Authority (FCA) has hit phone company Carphone Warehouse with a £29 million penalty for failings that resulted in the mis-selling of its insurance service Geek Squad.
Carphone Warehouse failed to properly train its sales staff, the FCA found. Staff were trained to recommend Geek Squad to customers who already had cover, for example through their home insurance or bank accounts.
“No training was provided on how to respond when customers gave answers indicating the policy may not be appropriate. 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 explained.
“Customers who said they might have a similar product or wanted to think about it were advised to purchase Geek Squad and cancel in 14 days. 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.”
The fine follows an FCA investigation that was triggered by whistleblower reports, the regulator said.
Alex Baldock, Dixons Carphone Group Chief Executive, expressed “disappointment” that Carphone Warehouse fell short, and added that the business was “very different today.”
Count this content towards your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet