Dixons Carphone fined £29m for insurance mis-selling

(Sharecast News) - The Financial Conduct Authority has fined Dixons Carphone more than £29m for insurance mis-selling.The regulator said that Carphone Warehouse, which is part of the merged Dixons Carphone retailer, had failed to provide its sales consultants with the right training to give suitable advice to customers purchasing Geek Squad mobile phone insurance.In particular, sales consultants were not trained adequately to assess a customer's needs to determine whether Geek Squad was suitable. They were trained to recommend Geek Squad to customers who already had cover, for example through their home insurance or bank accounts, the FCA found.Between 1 December 2008 and 30 June 2015, Carphone sold Geek Squad policies worth more than £444.7m, a high proportion of which were cancelled early.Mark Steward, executive director of enforcement and market oversight at the FCA, said: "The Carphone Warehouse and its staff persuaded customers to purchase the Geek Squad product which in some cases had little to no value because the customer already had insurance cover. The high-level of cancellations should have been a clear indicator to the management of mis-selling."Without whistleblowers coming forward these practices may never have come to light. In the past few years, whistleblowers have contributed critical intelligence to the enforcement actions we have taken against firms and individuals."Dixons Carphone said in a statement that it has worked closely with the FCA throughout the investigation and accepts that its practices fell short in the past.It said the company has introduced more comprehensive customer-needs assessments, enhanced colleague training and compliance monitoring. It has also invested in customer service and post-sale customer satisfaction, and substantially increased the number of independent financial services coaches across the Carphone Warehouse store estate.Chief executive Alex Baldock said: "We're obviously disappointed that Carphone Warehouse fell short in the past. But we're a very different business today; as the FCA acknowledges, we've made significant improvements since 2015. We're committed to stay on that trajectory, and to make sure all customers enjoy the right technology products and services for them."At 0820 GMT, Dixons Carphone shares were down 1% to 131.45p.