Filed under: iPhone
UK iPhone buyers 'misled' at Carphone Warehouse stores
The iPhone launch here in the U.K. has been hotly debated over recently, with all sorts of (lacklustre) sales figures mentioned, and a fair-few inaccuracies in supposedly factual coverage. An investigation by the BBC (being aired tonight) brings the launch yet more dangerous criticism - although on this occasion it's levelled at reseller Carphone Warehouse, who according to Auntie have apparently been misleading customers over insurance for the iPhone. The reason for the agressive (and inaccurate) upselling? Sales persons' desire to grab a slice of commission for the insurance sale.The investigation, as part of the BBC's Watchdog programme airs tonight, 8pm on BBC1.
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Reader Comments (Page 1 of 2)
Lee said 9:19AM on 11-28-2007
Nothing new here for UK people. It used to be Dixons ( Now Currys Digital ) with their "extended warranties" and it's now on phones. People forget here that we have a great set of consumer laws on product breakdown and your phone is normally covered on your home insurance if stolen.
Come on people we've been here before.. Work smarter ;)
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Paul said 9:56AM on 11-28-2007
Yup! They tried to sucker me into their ridiculously priced insurance too! I have O2 insurance (£7.50 per month), it's much cheaper, and covers EVERYTHING. The sales person was really, really pushing us on this insurance, making the experience quite displeasing.
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Josh said 9:36AM on 11-28-2007
This is precisely why we were planning to launch an iPhone insurance information website at iPhoneinsurance.org. It seemed that without an official plan, there would be plenty of misleading, and sure enough, there is.
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rdas7 said 9:44AM on 11-28-2007
Well, expect the BBC's reporting to be full of hyperbole and completely overblown, in an attempt to make a story about insurance exciting. They never let the facts get in the way of a good story.
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Simon said 9:53AM on 11-28-2007
Staff at the branch I was on on launch day were claiming you would only ever activate one iPhone. If you lost it, that would be it - no more iPhones for you. A level aboce the normal badgering us UK consumers get.
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Mark said 10:09AM on 11-28-2007
It's not just Carphone Warehouse, I was told the same lie (among others: "you can't take the SIM card out you know") by Orange when I rang to port my number to the iPhone, and my wife was told it by T-Mobile when she rang to port hers.
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eddyb64 said 10:21AM on 11-28-2007
@3 The BBC seem to reporting it exactly as it is. CPW tried exactly that pitch on a friend of mine when she bought an iPhone. Basically the line was: if you lose it you can't associate another phone with the existing contract, you have to buy a new phone and a new contract and you can't cancel the existing contract.
@1 This is different to the normal 'extended warranty' hard sell. They may be unnecessary but bare faced lies aren't (usually) told to sell them. In this case CPW staff are using a bare faced lie to con people. That seems to me (though maybe not to the law) to be a step beyond mis-selling, it's fraud.
I note that the implication is that this has occurred in a number of locations which suggests it could be CPW policy. That stinks and legal proceedings wouldn't be too harsh, IMHO.
Although we won't hear about it I posit that they'll get a pretty big slap from Apple - the iPhone gets a fair bit of partisan negative press over here in the UK; it doesn't need this sort of thing associated with it.
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David said 10:31AM on 11-28-2007
Good old watchdog.
I used to work for Dixons Stores Group who were always pulled up on extended warranties... ...until they donated alot of money to the BBC!
Oh and about the sales be "lacklustre". I am still in disbelief that I have yet to see an actual iphone on the street (Maybe thats because people don't have insurance and so keep them hidden away because they can't have another! lol)
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James said 1:00PM on 11-28-2007
They tried to sell it to me, saying that no other insurer could cover it. Then when i told them i worked for an insurance firm they went quiet on the matter. Think they must have realised that they were breaking the law.
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Ben said 10:59AM on 11-28-2007
So this is what they're spending their time on instead of filming new Dr. Who and Torchwood... Come on, BBC, focus on what's important!
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Adam said 11:16AM on 11-28-2007
@Ben - hahaha. Couldn't agree more!
(on topic, most household insurance will cover your iPhone without additional costs)
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WakkaWakka said 11:45AM on 11-28-2007
What an absolutely load of bullshit; it's disgusting that they're telling such patent lies to people. You have to buy an entirely new contract if you lose the phone?! What a crock!
There is an increasing desperation in UK phone shops to flog insurance, it's worse than the notorious 'coverplans' of the Dixons Group now. When I was buying my Blackberry I was asked repeatedly if I wanted to sign up for the CPW's 'Lifeline' insurance for £7.50 a month, and despite me declining point blank each tim the salesman still insisted on getting out the little leaflet and circling things and telling me all about how I was practically guaranteed to lose it and it would cost me lots to get a new one. Such bullshit, and such poor value - £7.50 a month to insure ONE BLACKBERRY?!
Insane. Everyone, avoid phone insurance. It's a rip off and you're probably covered by household insurance anyway (as others have said).
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Jono said 12:12PM on 11-28-2007
Yea, they really badgered me when I bought mine. Telling me that with all other insurance you'd have to start a new 18 month contract if you were supplied with another phone. And that only with theirs could you carry on with your existing contract if you received a replacement.
I also went with O2's cheaper option that covers everything.
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Lee said 1:04PM on 11-28-2007
This is also a prime example of the problem with buying an Apple product from a 3rd party reseller.
Here's why i say this :
You buy the iPhone from an Apple store and they have made their margin on the product and on the airtime.
You buy the iPhone from O2 they also make their margin on the product ( a little less ) and make the margin on the airtime.
You by the iPhone from CPW and they make little on the product and jack on the airtime so they are almost forced into upselling you items to make money from the sale.
Normally CPW would get a network signing on fee for "introducing" you to the network, but that seems to be void here the iPhone sells itself and the network choice is made for you. So really the upselling environment was kind of on the cards here.
Although it's not insurance AT&T stores were caught only selling iPhones as kits and not just handsets to make some extra money.
Where there is commission, sales targets and middlemen there will be lies told to make the sale for the commission.
Buy an iPhone from the Apple store is the answer and some might argue the experience.
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essjay said 3:31PM on 11-28-2007
The real reason for this isn't just commission, or making a margin, but more down to the way CarePhoneWarehouse pays it's staff. For those who don't follow the industry, CPW was pulled up a few years ago for not paying the UK minimum wage. This happens when an employee doesn't make any sales (typically, when they first start or are off ill). So you can't really blame the staff for trying to put food on the table. What you should blame is CPW for paying their staff incredibly tiny amounts.
Not that there are any excuses for mis-selling. Hopefully this will trigger a formal investigation by trading standards leading to an overhaul of selling techniques in the industry (and maybe pay at least minimum wage to the hugely annoying staff).
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leveldown said 3:40PM on 11-28-2007
It happened to me at Carphone Warehouse in Chichester. They tried to tell me if my phone was lost or damaged I would have to start a new 18 months contract with a new phone unlessI bough there insurance. They said any other insurance would cover the cost of the phone but not the 18 month contract. I asked them why this was the case and they said because Apple was recouping the cost of the phone through monthly fees from O2. At which point I pointed out to them that I dealt in contract law and that nay such terms would a) be considered an "unfair term of contract" and b) would in essence mean that APple had extended me a line of credit on the iPhone without telling me, something which is distinctly illegal in the UK. At which point said sales staff went very quiet. Especially when I took my time explaining the situation to several other iPhone purchasers who they were trying to con into taking out insurance.
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Fritz Laurel said 3:41PM on 11-28-2007
This is why you should never buy an Apple product anywhere but at The Apple Store.
Cheers,
FL
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glad said 4:25PM on 11-29-2007
Mmm slightly off topic but I think Apple dropped the ball on this one as they should have sold the iPhone unlocked at £349 (UK) or dished it out to all the other network providers. Also they were greedy in asking for a slice of the phone revenues, they should have been told to take a hike. The way it is I'll never buy one as the contract with 02 sucks and I am with two other providers.
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Mark Wilson said 3:56PM on 11-28-2007
It's not just the Carphone Warehouse that are doing this - I had the same experience in an O2 store when I bought my iPhone.
I managed to cancel my insurance after O2 confirmed in writing that I would be able to buy a replacement at the current recommended selling price (i.e. £269 today) and would be released from the original contract but tied into new one for 18 months.
Still trying to get a decent explaination from O2 though.
@7 as for Apple, their PR people wouldn't even respond to me when I asked them for comment.
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Mark Wilson said 3:59PM on 11-28-2007
I'd be interested to hear from anybody else who had this experience in an O2 store - please contact me via http://www.markwilson.co.uk/blog/2007/11/the-great-iphone-insurance-swindle.htm
Mark
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