Dixons Carphone has been fined £29.1m by the Financial Conduct Authority (FCA), for mis-selling technical support and mobile phone insurance, known as “Geek Squad.”
Carphone Warehouse trained their staff in “Spin selling” the insurance product to customers who already had insurance, according to the City watchdog.
A whistleblower triggered the investigation which found Carphone Warehouse made sales of more than £444.7m between 2008 and 2015 through Geek Squad.
The watchdog said 35% of insurance policies were cancelled in the first three months, an indicator of mis-selling.
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.”
Alex Baldock, chief executive Dixons Carphone 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.”
Dixons Carphone accepted the FCA findings over the probe, and qualified for a 30% discount.