Dixons Carphone handed £29.1m fine for "mis-selling" geek Squad service

Joanna Estrada
March 15, 2019

When customers complained about the Geek Squad sales, Carphone Warehouse failed to investigate their complains, resulting in not upholding valid complaints where the product had been mis-sold and management not having "an accurate impression of indicators of mis-selling", the FCA said.

Shares fell 1.5% at the opening bell to 130.8p, having climbed 10% in the opening two-and-a-bit months of 2019.

Carphone Warehouse has been fined £29.1m by the UK's financial regulator for mis-selling gadget insurance through its "Geek Squad" service.

The FTSE 250 company acknowledged that its practices had fallen short in the past.

Alex Baldock, the Dixons Carphone chief executive, said: "We're obviously disappointed that Carphone Warehouse fell short in the past".

Handed to the retail giant by the Financial Conduct Authority (FCA), the fine relates to the mis-selling of its geek Squad services.

Carphone had told staff to recommend its Geek Squad insurance and technical support product to shoppers even if they were already covered by home insurance or bank account policies.

The regulator detailed that a high proportion of these policies were subsequently cancelled early.

The regulatory body launched an investigation which found staff were trained in "spin selling" to convince customers to pay for Geek Squad and were not adequately equipped to handle complaints between 2008 and 2015. Sales staff were also trained in "objection handling", focusing on overcoming customer objections rather than assessing whether the insurance was suitable for them.

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".

"The high level of cancellations should have been a clear indicator to the management of mis-selling", he said.

The FCA say customers who think that they may have been 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 www.geeksquad.co.uk/contact/complaints ).

A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017.

Carphone Warehouse, Britain's biggest mobile phone seller, merged with electricals retailer Dixons in 2014.

Other reports by Click Lancashire

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