Phones4u customer service firm fined £2.8m
Shoddy complaints handling by the company that oversees customer services for those buying mobile phone insurance through Phones4U has resulted in a £2.8 million fine by the regulator.
The Financial Conduct Authority found that between June 2009 and September 2011, Policy Administration Services (PAS) failed to treat customers fairly with its inability to identify what had gone wrong and to put things right when dealing with customer complaints.
In a statement, the FCA said: "Underlying all of the failings was PAS's failure to record complaints, meaning that management information and regulatory reporting was wrong."
Other serious shortcomings included:
- Complaints were not investigated fully or resolved appropriately or consistently
- Complaints about mis-selling were often rejected just because the customer had signed a direct debit form
- The failure to investigate and address the root-cause of complaints about the sale of insurance policies, such as mis-selling.
The regulator also criticised PAS for not being able to "accurately detect areas that were repeatedly being complained about so it could put them right and improve its customers' experiences".
It said such standards are expected of all regulated firms and are designed to ensure that when problems do occur, they are quickly identified and corrected.
PAS has since reviewed its complaints processes and has paid compensation to 1,438 customers whose complaints were not dealt with properly.
Tracey McDermott, the FCA's director of enforcement and financial crime, said: "PAS had wide ranging failures across its complaints handling processes – it failed to investigate complaints properly or to keep accurate records. This is simply not good enough – it does not meet our requirements and does not meet the needs of customers.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.