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Mobile phone insurance nightmare - fonesafe

So, here's a description of what's been going on between me, fonesafe and T-Mobile lately...

Approximately a month ago, my phone stopped making/receiving calls and texts. This phone was a replacement device I got from fonesafe after my phone got lost.

I phoned up T-Mobile having in mind that fonesafe works with them and told them about the error that would came up on my phone and they informed me that the IMEI got blocked by the network and that I'd need to send T-Mobile a proof of purchase to get in unblocked.

I then called fonesafe and asked for a copy of my receipt. The copy was sent and I forwarded it to T-Mobile who said they'd unblock the device within 24hrs.

This has happened once again with the same device, about a month after I received it from fonesafe so I wasn't really worried as I'd known what to do.

Days passed and the phone remained blocked. Further phone calls and emails later, I was told that O2 blocked the phone. I've never been a customer of O2 or had any contact with them before!

I called and called and called fonesafe and T-Mobile and no one would take responsibility. I even mailed O2 with a proof of purchase and they still didn't unblock the device. I called up consumerdirect and they told me to write a letter to fonesafe, stating that the device is not fit for purpose and they're breaching the terms of the contract by not providing me with a working device.

A fonesafe manager called me the next day (Friday) saying that the phone would be working by Monday and that she had just spoken with O2 who ensured her the device would be back to normal within 24hrs.

Monday came, the device was still not working. I called up fonesafe and spoke to the same manager again who said it'd be back by Tuesday.

Still, the phone does not work. I wrote another letter to them and asked them not to call me and tell me that my phone would be activated within 24hrs, as this has happened numerous times through the past month.

I don't really know how to proceed from now on. They refuse to replace the handset unless O2 refuses to unblock it (which I dont see happening soon). I think this is a problem of fonesafe and they have to replace the handset. As this isn't the first time its being blocked (irrespectively of the network) they should replace the device. Should I write a letter to Ombudsman? I was also told to speak to the Financial Services Authority.

Any suggestions are welcome as I can't take this for much longer.
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