Fines 4 U: Mobe insurer cops £3m penalty for grumble dumping A firm that sells mobile insurance to Phones 4u customers has been smacked with a fine of almost £3million for ignoring customer complaints. The Financial Conduct Authority (FCA) fined Policy Administration Services Limited (PAS) £2,834,700 for "poor complaints handling" between June 2009 and September 2011. The accusations …
@John Riddoch
Yup, from the bank account here too. Better still, it actually works; we claimed to replace my son's phone (Galaxy Note), no problem, brand new replacement. Mind you, he had fallen thirty-odd feet into a shallow river with a rocky bed, spent about 90 minutes in the water before being airlifted to hospital and another two weeks stabilising two crushed vertebrae and a cracked pelvis, so the insurance company couldn't really argue that it wasn't accidental damage...
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In some cases the people who ring you up offering it are fraudsters and the insurance does not exist.
I ask myself if I have ever broken or lost a phone, the answer is no. So why would I need insurance for something I could easily replace?
You can't cheaply replace a house or a new car. So insurance on those is worthwhile (but usually mandatory anyway).
When I bought my HTC One SIM free the shop tried to sell me "geek squad" support. Why on earth would a geek like me need a geek squad helpline? honestly :)
A basic rule is that if one is buying a product, one should never buy optional insurance from the same person who is selling you the product. This applies to mobile phone insurance, payment protection insurance, car rental excess insurance, extended warranties (just another form of insurance, really) and a whole pile of other things. At best the insurance will be overpriced, and at worst it will be overpriced and inadequate as insurance. That's not to say that you should not buy insurance, just that you should buy it directly from a financial institution or insurance broker.
Mobile phone retailers (including Phones 4 U) have been particularly bad in this regard. They are not as bad as they used to be - situations in which you are forced to take it out with "one month free" and have to do something in that month to cancel it seem to be rarer now. Regulators have been cracking down (as here). Good.
It doesn't matter if you don't take the mobile phone insurance at time of purchase, or not. You'll get it anyway. Well that used to be the case when I temped for a mobile phone insurance company for a month, after redundancy. They had the temp (i.e. me) operate the credit card terminal totally unsupervised (nice security!) - and I also dealt with the customer complaints. And pretty much everything else come to think of it. That place was run on a shoe-string. They must have been raking the cash in, as they were an established insurance company who'd branched out into doing outsourced insurance for a big chain of mobile shops. I think they had one 'manager' and 2-3 temps.
On investigating direct debits, I'd come across many forms where the phone insurance bit was filled out in different pens, and different handwriting, to the sales form. Nothing suspicious here then. But I'm sure a few sales guys never missed their targets on insurance sign-ups...
I can't complain about the mobi insurance offered by my bank. £50 excess but they've replaced m broken phones twice now.
The only odd thing is, when putting in your claim online, the field for explaining what happened requires 150 characers MINIMUM. I struggled stretching "I fumbled the phone taking it from my pocket an it smashed on the floor". I ended up talking about the weather for the day.
Easy.
"I reached into my jacket pocket to retrieve my mobile telephone and as I removed it from said pocket, the infernal device slipped from the grasp of my fingers and full upon the floor at my feet. Whilst I retrieved the device in question, I subsequently determined that its untimely descent onto an unyielding surface had rendered it entirely inoperable."
See? Well over the minimum and I didn't have to mention the weather at all......
The company has been walloped with a big fine; from it's point of view, it'd be better to pay the extra to keep customers happy, rather than have unhappy customers, the fine and bad publicity.
Hopefully the fine is big enough to do this and not just be treated as a 'cost of business'.
I don't think I've had mobile insurance since Orange offered it free for 12 months with new handsets (remember that? 1997?).
I've never knackered a mobile to date - if I'm honest I have a big box of museum pieces^H^H^H spares in case I do knacker one mid-contract, but I've been buying unlocked handsets for years now anyway. At £5/month or what ever I think I've saved enough to cover a replacement or two and still be up on the deal.
Never bother with extended warranties either. When I was offered a £150 extended warranty on a £600 appliance recently a simple calculation showed they were expecting a 1 in 4 chance of a total failure in the covered five years. My request to the sales droid to instead show me some more reliable appliances just got a blank look. Perhaps that question isn't covered in the script?
The best thing to do is say "no thanks" when they try and push it. If you absolutely must have insurance there are better deals online from virtually every major insurer. The ones in the shop are just a high priced scam and the sales people are on commission to push it.
Related to this, I bought a car last year and they were trying push a "showroom insurance" on me which I said no thanks to, despite quite a sales pitch. When I looked online I found I could obtain an equivalent policy for half the price, not that I was interested in taking it even at the reduced price.
Mine is with my bank (Halifax Ultimate Rewards) and when my Samsung Galaxy S3 was stolen by pick pockets in Barcelona I got a payout within two weeks. OK it wasn't the full amount due to excess but I received 85% of the value so can go ahead and buy another handset. Some insurance does work.
I used to work at this company (PAS/LSG/4UGroup). This is the least of their worries. They aren't PCI compliant, use pirated software, and had 20 million CC numbers stored on a portable HDD.
One for giggles - when the server room flooded with sewerage, the IT Director had everyone in there, despite electrical commando sockets, mopping it up with paper towels :)
Perhaps worst, a good while before I left, they had huge promotions involving TCF...
AC kinda obvious :)
When buying a phone on contract the phone and the contract should be separate costs so you know what you're paying for the device and your line rental.
Why can I not get a brand new phone without a contract (as in released today, top of the range)?
Personally I think the whole mobile industry is bloody scam and needs major shake ups!
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