Domestic appliance insurance miss-selling

Whirlpool_Victim

My first post!

I can do no better than reproduce a message sent to my MP, James Purnell tonight, which is hopefully self-explanatory:

I would ask you to look at what I believe to be a case of insurance miss-selling, albeit not of the usual variety.

This concerns the selling of insurance to cover one against repairs to household appliances. The company involved is Whirlpool (UK) Ltd and the linked insurance is Domestic and General Ltd.

I will try and keep the details to a bare minimum at this stage and just supply you with the highlights so you can get a general feel for the problem which I wish to bring to your attention. However fuller details can be found in my blog, at http://whirlpoolfridgefreezer repair disaster.blogspot.com

In summary, I telephoned Whirlpool in January and after speaking to them took out an annual insurance policy at a cost of £249. This covered me against the cost of repairs and labour on my American-style fridge freezer. Whilst I was told, in line with the script followed by Whirlpool’s staff, that if the cost of repairing the machine was uneconomic then the policy would be cancelled and the premiums refunded, I was not told what this meant in practice. Namely, that the cost of the initial repair had to be £350 or less.

Suffice to say as the cost of repairs were £411 the policy was duly cancelled.

When I questioned this with Whirlpool, it was only then that I was told of the £350 limit, that is, that was what the company and/or its insurer meant by the term 'beyond uneconomic repair'.

So to be clear on this, anyone paying what is, by definition an insurance premium of £249 can only expect, at most, to get an initial repair of up to £350. Not much of a deal there, I would have thought and I don’t imagine too many would have taken out such a policy in those circumstances if the full details had been explained.

Now can I be clear about what my purpose is in writing to you. I do not seek financial compensation - I do not want anything - for me. I simply want to highlight what seems to me to be a practice that is wholly wrong, in that the company deliberately holds back perhaps the most important piece of information the consumer needs before he/she can make an informed decision to purchase.

I have brought this matter up with Whirlpool who say, and I quote' It would be absolutely impossible to explain all terms and conditions over the telephone and to ensure all information given is correct terms and conditions are issued in writing so a customer can read them, fully understand and ensure that the terms and conditions meet all their requirements and if not cancel within a 14 day period’. Whilst the grammar is not perfect you can get the gist.

But I do not for one moment think this is a reasonable response - it only takes an additional sentence after all, as they know full well what the limit is. Indeed, when I later received and reviewed the policy I noted it did not give details of the £350 limit - so the customer could not know in advance what the limit was.

My point is simply this. The company should be forced to make all relevant terms and conditions clear at the point of sale so that consumers can make an informed decision at that stage as to whether they wish to proceed with the purchase. In particular, the £350 limit.

To repeat, and for the avoidance of any doubt - I am not after anything for myself - all I have lost from the process has been time and frustration, oh and the not insubstantial matter of being without a workable fridge freezer for a period, because I have been led a song and dance by the company. However, I would want to try and help others from going through the misery I have, just because Whirlpool do not, for their own reasons, make it clear at the point of sale what the relevant terms and conditions are.

I hope that you may be able to use your considerable influence to bring this sharp practice to an end by getting the company to modify its script when selling policies to unwitting consumers at a time when they are perhaps at their most vulnerable.

If it is of help the company can be contacted at PO Box 45, 209 Purley Way, Croydon CR9 4RY and the managing Director is a Mr P Conte.

And finally, I have further documentation in terms of letters/e-mail than can be made available to you if required. (end)

For good measure I've sent something similar to Croydon Trading Standards department, BBC Watchdog and Tony Hetherington of the Mail On Sunday.

Oscar_The_Grouch

Hi there

Thanks for your very interesting post. I have not read your blog, but if you have exhausted the complaints procedure of the insurance company behind the policy, you have the right to refer the matter to the Financial Ombudsman Service.

Perhaps you should consider your position and make a complaint to them.

dacouch

These warranties and their prices do make me laugh, they are ridiculous.

What annoys me is Insurance Company Staff and brokers are highly trained and highly regulated by the Financial Services Authority and people with very little experience of Insurance such as Shop Assistants and Travel Agents can sell an insurance policy.

The political clout of their trade bodies getting their concessions has not helped the public which is what the whole idea of the FSA was.

May be I should start selling holidays and computers of which I know very little about to even things up

Whirlpool_Victim

Oscar_The_Grouch wrote: »

Hi there

Thanks for your very interesting post. I have not read your blog, but if you have exhausted the complaints procedure of the insurance company behind the policy, you have the right to refer the matter to the Financial Ombudsman Service.

Perhaps you should consider your position and make a complaint to them.

Thanks for this. I got a reply from my MP today, who suggested exactly the same thing about the FOS - I've filled the form in already!

And James Purnell says he has made representtaions on my behalf to the Minister for Consumer Affairs. I'll wait and see what if anything transpires and post the results.

Whirlpool_Victim

News update on my previous complaint about Whirlpool's policy on selling extended warranties:

My MP got on to the Department for Business Enterprise & Regulatory Reform (BERR) to look into the matter and they have no replied favourably, indicating that the points I raised were covered by the Consumer Protection from Unfair Trading Regulations 2008 and The Supply of Extended Warranties on Domestic Electrical Goods Order 2005.

They advised me to take matters up again with Trading Standards and this I have done.

So I will keep the pressure up to try and make Whirlpool change this unfair practice, and will keep this site informed as and when I hear anything further.

LinasPilibaitisisbatman

You may feel hard done by but in law there is nothing wrong with this.

Whirlpool_Victim

LinasPilibaitisisbatman wrote: »

You may feel hard done by but in law there is nothing wrong with this.

I would be genuinely interested as to why you say this, as according to the BERR, the circumstances described are exactly the kind of things covered by the legislation quoted - hence the referral to Trading Standards, as advised by them.

Whirlpool_Victim

Whirlpool_Victim wrote: »

I would be genuinely interested as to why you say this, as according to the BERR, the circumstances described are exactly the kind of things covered by the legislation quoted - hence the referral to Trading Standards, as advised by them.

Have spoken to Trading Standards following my referral. They accept, prima facie, there is something to question and have agreed to make appropriate enquiries of the company.

Whirlpool_Victim

I've now had an update from Croydon Trading Standards, who deal with Whirlpool - merton Council deal with D&G:

'I am now in a position to give you a final update in relation to your referral to me concerning Whirlpool/D&G Policy.

Under the new Consumer Protection from Unfair Trading Regulations 2008, they require traders not to omit or hide information, which the average consumer needs to make an informed choice.

My colleague at Merton is in talks with D&G for them to change their policy and call center wording so that they comply with these regulations with regards to the selling of their policies. I am afraid I cannot go into too much detail with you as the final wording has not yet been agreed but please be assured that the matter will be dealt with by all parties to a satisfactory conclusion'.

Thank you for bringing the matter to our attention'.


So it seems that D&G/Whirlpool will have to change their ways after all. I will ask to be advised of the revised wording when agreed and post it on here.