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Carphone Warehouse fined £29.1 million for mis-selling Geek Squad insurance

Carphone Warehouse has been fined £29.1 million by the Financial Conduct Authority for mis-selling a mobile phone insurance and technical support service known as 'Geek Squad'.

Update Mon 25 Nov: We wrote this story back in March but the principle still applies and Resolver has told us you can still claim money back through it. 

The Financial Conduct Authority (FCA) said Carphone Warehouse trained staff in "spin selling" the insurance product to customers, some of whom already had insurance cover.

Between 1 December 2008 and 30 June 2015, Carphone Warehouse sold Geek Squad policies worth over £444.7 million.

The FCA also said that, as an example, in January 2014 35% of the insurance policies were cancelled within three months of being purchased, which is a key indicator of mis-selling.

And it said the firm also failed to properly investigate and fairly consider customer complaints.

How many people are likely owed? understands that around 28,000 customers could be owed money, although many of these are likely to have already got cash back through two redress schemes run by Carphone Warehouse.

The amount of money that customers will likely be owed if they were mis-sold will vary massively, but for those who were mis-sold and cancelled within three months of buying the products, the figure could be quite small.

For example, if you had a policy worth £4.99/month and cancelled after three months, that policy would be worth less than £15.

What did the FCA find?

The FCA says that Carphone Warehouse sales staff were trained in 'spin selling', where the focus was on persuading customers to purchase Geek Squad and on selling the features of the product.

It says that no training was provided on how to respond when customers indicated the policy may not be appropriate, and that sales staff were trained in 'objection handling', with the focus being on overcoming customer objections rather than deciding whether the product was suitable for the customer. 

According to the FCA, 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 didn't need and pay for it if they didn't cancel in time.

When customers complained about the sale of Geek Squad, the FCA says Carphone Warehouse failed to properly investigate and fairly consider their complaints and this resulted in valid complaints not being upheld in circumstances where the product had been mis-sold.

I think I was mis-sold – what should I do?

The £29.1 million fine will go to the Treasury, but if you're a Carphone Warehouse customer and think that you may have been mis-sold Geek Squad, you can try and reclaim direct from the firm:

You can also use Resolver, which will take you through the reclaim process and prompt you to go to the ombudsman if your initial complaint isn't successful.

When you complain, you'll be asked to give as much detail as you can, so it's worth trying to remember what you were told when you purchased the product and how soon you cancelled.

Evidence such as receipts or bank statements showing you purchased the product, and any evidence of other insurance you already had, would also be useful.

If you're not happy with Carphone Warehouse's response, you may then refer the matter to the Financial Ombudsman Service.

I think my complaint was wrongly turned down, what should I do? 

The FCA says Carphone Warehouse failed to properly investigate complaints, which resulted in some valid complaints not being upheld when Geek Squad had been mis-sold.

If you think you were mis-sold and your complaint to Carphone Warehouse was wrongly turned down, you should complain again via the methods above.

'It's good to see the regulator taking action'

Steve Nowottny, news and features editor at, said: "It's good to see the regulator taking action today, but its findings are alarming. It's frankly shocking that Geek Squad cover was mis-sold on such a wide scale, that staff were trained so poorly and that Carphone Warehouse failed to properly investigate complaints from customers.

"Anyone who thinks they were mis-sold and hasn't already claimed money back through a previous redress scheme should contact Geek Squad as soon as possible.

"Explain why you believe you were mis-sold, including evidence such as receipts if you have them – and if you're not happy with the response you get, don't be afraid to escalate your case to the Financial Ombudsman Service."

What does the FCA say?

The issues at Carphone Warehouse were initially revealed to the FCA by a whistleblower.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "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."

What does Dixons Carphone say?

Dixons Carphone 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."

As Dixons Carphone has accepted the FCA's findings, it qualified for a 30% discount. Otherwise the fine would have been much higher at around £41.6 million.

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