Mobile phone insurance firms have been attacked by the City watchdog after it found evidence of poor product design, unclear terms, and inadequate claims and complaints handling.
The Financial Conduct Authority said it will impose a significant fine on one firm for poor handling of complaints. Clive Adamson, the FCA’s director of supervision, warned about mobile phone insurance, after the regulator investigated the way firms design products and handle claims from customers that have lost or damaged their phone, or had it stolen.
“Sometimes there is a gap between what the customer thinks they are getting, and what they are really getting,” Adamson said. The FCA has demanded insurers change their terms so they are clear about when and where consumers are covered.
It has also told them to remove a two-stage claims process, where a claim might be initially rejected but is then overturned if customer is persistent and complains.
Mobile phone insurers have also been told to speed up their claims handling.
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