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Release Date: 13th March 2019

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined The Carphone Warehouse £29,107,600 for mis-selling its ‘Geek Squad’ mobile phone insurance and technical support product. This fine follows an FCA investigation initiated by whistleblower reports.

The FCA found that The Carphone Warehouse failed to provide its sales consultants with adequate training to offer suitable advice to customers purchasing Geek Squad. Sales consultants were not equipped to assess customers’ needs properly and often recommended Geek Squad to customers who already had sufficient cover through other insurance policies.

Between 1 December 2008 and 30 June 2015, The Carphone Warehouse made regulated sales of Geek Squad policies worth over £444.7 million. A significant number of these policies were cancelled early, with 35% being cancelled within the first three months in January 2014. Such high cancellation rates indicated a risk of mis-selling, which The Carphone Warehouse failed to address adequately.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, stated that the company and its staff persuaded customers to buy a product that often had little to no value, given their existing insurance coverage. He emphasised the role of whistleblowers in uncovering these practices.

The FCA’s investigation revealed that sales staff were trained in ‘spin selling’ techniques focused on persuading customers to purchase Geek Squad, without training on responding to indicators that the policy might be inappropriate. Complaints regarding Geek Squad were not properly investigated, leading to a misinformed management view on the extent of mis-selling.

As a result, The Carphone Warehouse breached Principle 3 (management and control), Principle 6 (customers’ interests), and Principle 9 (suitability of advice) of the FCA’s Principles for Businesses. The firm accepted the FCA’s findings and qualified for a 30% discount on the penalty. Without this discount, the financial penalty would have been £41,582,300.

Key Takeaways for Other Firms:

In conclusion, The Carphone Warehouse’s significant fine underscores the importance of proper training, thorough complaint investigation, and adherence to regulatory standards to protect consumer interests and maintain market integrity.

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