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The specific reason to which your policy could be classed as mis-sold will depend on several factors. Firstly, the type of insurance product you have purchased, how and where you purchased the policy from. However, there are some common practices that are viewed as mis-selling. Regardless of the type of policy you have been sold, the retailers have a duty of care to ensure their product was suitable for your circumstances but was not recommended. Salespeople are regulated on a non-advisory basis meaning they are not allowed to give a recommendation or an opinion to encourage the consumer to purchase their products.
For example: If you agreed to purchase Stain Protection or care plan for a sofa and the salesperson has not established the furniture is to be situated for a rental property, business premises or even taken abroad, they, unfortunately, haven’t fulfilled their duty of care as the policy is invalid instantly.
Have they checked and confirmed you are 100% eligible to claim and have you agreed there is a genuine need for the cover?
If an individual or company has implied that the insurance is compulsory when it is NOT is against the rules and regulations when selling these types of extended warranties.
For example: In the electrical/appliance world the sales advisor explained you will not be able to purchase the TV on the store credit without the care plan, as the finance company will not allow it? This is completely NOT true; all extended warranties are completely OPTIONAL.
Another underhand tactic often used to apply undue pressure from salespeople is a term referred to as “second facing”, this is when a salesperson has to be assisted by a more senior or experienced individual to resell the insurance. This makes the consumer feel really uncomfortable and backed into a corner, so they agree to purchase just to avoid feeling pressured. The other common practice is that a salesperson goes on repeatedly offering and forcing the additional product on to the consumer after they have declined the product. This is in hope they eventually wear down the customer who reluctantly agrees to add it to their order.
The main tactic that we have witnessed and is often how the price of extended warranties are mis-represented is when the full policy cost is not disclosed. What regularly happens is the salesperson divides the total policy cost over the policy term rather than the actual repayment term.
For example: You purchase a 3 seater sofa, 2 seater sofa and footstool. You decide to take advantage of their interest free credit offer and spread the cost over 36 months. The total cost of the extended warranty is £250.00 which increases your payment by £6.94 per month. The salesperson divides the insurance cost over 60 months when verbally quoting you a price. This is the length of the warranty and not the repayment term. The cost of the cover then quoted is only £4.17 per month which is deliberately misleading the customer. Often, they then round down the price and advise £4.00 per month and then say it’s only £1 per week to disguise the true costs.
As crucial as it is for a salesperson to explain all of the benefits to the policy they are selling, it is equally as important for them to share all of the exclusions. This way the consumer can make a genuine decision as to whether they would like to purchase the product or not. Salespeople often forget or chose not to mention the policy exclusions. More often than not exclusions are briefly mentioned but not accurately and never with the same enthusiasm and depth as the policy benefits. Firstly, has the sales representative mentioned exclusion at all? If they have, have you seen the exclusions in writing and been given the time to understand them? When making a claim have you been made aware of an exclusion that the salesperson led you to believe was different to the reality? This seems to be common practice across the retail world.
What we have also witnessed is the salesperson is aware that should you have time to digest the policy there is a probability you will attempt to remove it in your cancellation period so, they make an informed decision to not provide you with the policy documentation or terms and conditions in hope you pass the cancellation period and don’t contact them to remove the policy.
Most extended warranties have some specific areas where claims are limited and often you are advised that this reason is covered under the policy, but the limitations are not explained. For example: You purchased a 5 year care plan for a leather sofa but were concerned that your pet may scratch and mark the leather. The advisor reassures you “pet damage is covered under the policy” but fails to explain its a single claim only, not for the full policy term.
This practice is where a salesperson finds out what you are wanting to purchase and quotes you prices including the extended warranties. Often staff refer to this as “rolling the bits” and is more commonly used when taking advantage of store credit where the additional
costs are disguised in the monthly repayments. Generally, there are two tactics used when this is executed. Firstly, the salesperson waits for you to agree the repayment amount and says “great news, that includes your protection also” and assumptively moves on. The other way is that they don’t say anything until you do and the product is added to your invoice and if it is questioned by you, they play innocent or blame it on the system they are using.
One practice that has become undoubtedly more common in recent months, are salespeople suggesting they can get you a quicker delivery/lead time on products if they are purchased with the warranties. They will say they have one on the way or already in stock, knowing that due to the supply and demand circumstances of the world, the need for a quicker delivery automatically gains them an advantage to sell there additional services.
For example: A customer wants to order a leather sofa which is produced in China. The quoted lead time was 16 weeks but the customer really doesn’t want to wait that long. The salesperson advised they had a cancelled order on its way in the combination and colour the customer wants, and it would be available in 12 weeks but it had the 5 year protection. The customer was advised if they wanted the quicker delivery, it was available providing they also purchased the warranty otherwise they would need to be patient and wait the longer delivery.
It’s so simple, by completing the Online Claim Form we will have all the necessary information to confirm if we are able to act on your behalf. Once we have validated you’re your claim we will send you a Transfer of Authority form allowing Recompensa to act on your behalf. Once we have received this completed form our specialists will get to work.
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