Overhaul phone cover, insurers told

Mobile phoneMobile phone insurers have been told to overhaul the small print in contracts after the regulator found in some cases it was "virtually impossible" to claim.

The Financial Conduct Authority (FCA) highlighted examples of poor claims and complaints handling, as well as products which were not designed to meet customers' needs and terms and conditions that were unclear and unfair.
%VIRTUAL-SkimlinksPromo%It has urged firms to bring in more everyday insurance products that do "what they say on the tin", adding that next month it planned to impose a significant fine on one player in the market for poor handling of complaints.

The review of nine firms by the consumer watchdog comes amid rising anger that technicalities in small print are being used to reject legitimate claims. The financial ombudsman tackled 615 new complaints about mobile phone insurance in 2012/13, finding in favour of consumers in 71% of cases.
In one example highlighted by the FCA, a claim was rejected because the owner left her phone in an hotel room, which was deemed to be a public place as soon as she checked out and therefore was excluded from cover. The regulator said that descriptions of what is covered and what is not were often too broad and ambiguous.

FCA director of supervision Clive Adamson said: "What this review shows is that sometimes there is a gap between what the customer thinks they are getting, and what they are really getting. Closing this gap will lead to greater trust and confidence."

The FCA said that firms were already working on making improvements to their products since the launch of its review.

Mr Adamson added: "Mobile phone insurers need to continue in this vein and show their customers that they are putting them at the heart of their business models, and offering everyday insurance products that do what they say on the tin."

Figures from Ofcom show that 92% of adults personally own or use a mobile phone, while there are more than 10 million insurance policies in existence.

Which? executive director Richard Lloyd said: "Mobile phone insurance could be a good idea for those with a valuable handset, but the industry needs to show real improvement before consumers can have full confidence in the product. For anyone considering this cover, it's vital to shop around and read the small print first, as well as checking their home insurance policy as it may offer the same cover at a lower price."

10 consumer rights you should know
See Gallery
Overhaul phone cover, insurers told

The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.

This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.

Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".

Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.

If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.

If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.

After this point, you can only really expect an exchange, repair or part-refund.

The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).

Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

The FOS settles disputes between financial companies such as banks and consumers.

If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.

The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.

Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.

They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.

What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.

You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.

Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.

They cannot, for example, enter your home and take your possessions in lieu of payment.

In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.

Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.

You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.

You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.

We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.

In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.

Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.

Read Full Story