Carphone Warehouse has been ordered to pay a fine of almost pounds 250,000 after regulators found it had been breaking the laws governing sales of mobile phone insurance for more than 10 months.
The Financial Services Authority (FSA), the chief City regulator, revealed yesterday that 118,000 customers who bought insurance from Carphone between January and October last year had not been sent a written statement explaining why the policy was suitable, as insurance regulation requires. Almost half did not even receive a summary of their insurance cover, setting out the main features of the policies they had paid for.
The regulator takes breaches of the rules on the information that must be sent to policyholders after the sale of an insurance policy particularly seriously because, by law, customers must be given an opportunity to consider whether the cover they have bought it suitable for their needs.
Sarah Wilson, director of retail firms at the FSA, said the pounds 245,000 fine reflected the seriousness of the misselling case. She said while Carphone had first become aware of the problem last March, it had not been rectified until October.
The failures affected customers who bought policies through a sales company …