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Mobiles.co.uk & O2 - Mis-sold insurance with an iPhone and now won't pay out

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Hi there, my brother-in-law recently bought an iPhone through mobiles.co.uk and clicked to sign-up to their insurance. At no point during the purchase process did they detail the nature of the cover but they did send a confirmation email stating that the cover was from Carphone Warehouse and giving a link to their website page about insurance. After reading, it stated that Carphone Warehouse phone insurance covers for loss, accidental damage and theft.


A few weeks later my BIL was extremely unlucky and lost his phone from his pocket. He is certain it was stolen as his pockets are pretty deep and he felt he would have heard it drop. He then reported it to the police but because he didn't see someone steal the phone they put him through to report it as 'lost'.


He then contacted mobiles.co.uk who gave him the details for Aviva. They used clever language to get him to say his phone was 'lost' before he could explain properly what had happened and then very quickly responded that he wasn't covered for loss and he'd have to buy a new handset and in the meantime keep paying his O2 bills.


He wrote a letter which he sent to Mobiles.co.uk (see below) but got a rather paltry stock response telling him to refer to their website insurance page to see what he was covered for. They never sent him any documentation or detailed policy wording so all he had to refer to was the Carphone Warehouse website. It was only when he tried to claim that they told him it didn't cover loss.


Not sure where to go from here. My view is that it wasn't unreasonable for him to assume he'd be covered for loss - especially seeing as they told him cover would be from CW and that their cover includes loss. I also believe they mis-sold him the insurance - leading him to believe it covered loss and I also believe it wasn't fit for purpose - surely even a basic policy would cover loss.


Who does he complain to - Mobiles.co.uk, Carphone Warehouse, O2 or Aviva?


Does anyone have any similar experience and have any action they can suggest. I get the feeling this scenario could drag out for sometime as all parties claim it's everyone elses fault.


Letter content below:


Re: Mobile Phone Insurance


On 24 September 2009 I purchased an Apple iPhone via your website along with which I purchased along with your mobile phone insurance. During the purchase process your website clearly stated that I would be provided with phone insurance although at no point did it require me to read and confirm I had read through the policy details. It did say I would be sent the policy details by post – which I never received.


On 2 November 2009 I went out shopping with my partner and I noticed my phone was no longer in my pocket. I contacted the police to report the phone stolen because I believed it had been pick-pocketed but when I spoke to the police contact centre I was put through to the team to report it as a loss because I had not physically witnessed somebody stealing it from my pocket.


I am absolutely certain the phone would not have fallen from my pocket because I have always kept my phone, wallet in keys in those particular pockets and have never dropped them. I am also certain I would have heard my phone drop to the floor if I had simply lost it.


When I contacted your insurance provider to make a claim, they processed it as a loss without actually asking me in detail what had happened. They seemed very keen to define the claim as a loss without being clear that a loss would not be covered. I feel very strongly I was tricked into saying the phone was lost in order that your insurers did not have to pay out. As a result, they advised me I was not covered for losses and I would have no choice but to purchase a brand new phone.


To make the intention of my letter very clear, I write to complain about:


1.You misled me during the sales process because you did not make me aware that the insurance did not cover loss.

2.When I tried to make a claim, your insurance provider’s call centre tricked me into claiming that the phone as lost so that they could reject my claim.

3.You have sold me an insurance policy that was not fit for purpose.


My reasons for making complaints on these points are:


1.You misled me during the sales process because you did not make me aware that the insurance did not cover loss:

a.You failed to required me to read through the policy wording and click to confirm before completing my purchase. However, you did state throughout several places on your website that the insurance is provided by Carphone Warehouse. It therefore would be reasonable for me to assume that the level of cover would be the same as that provided when purchasing via the Carphone Warehouse site.

b.You failed to send me any documentation despite promising to during the online purchase process.

c.You failed to provide me with any detailed policy wording and the level of cover provided in the email you sent me confirming I had purchased the insurance.

d.In the email you send confirming I had purchased insurance you sent me a link to www.carphonewarehouse.com/insurance. When clicking that link there was no clear information explaining there are differing levels of cover for customers from mobiles.co.uk. However it does quite clearly invite people to make a claim for LOSS or theft – which insinuates I would be covered for loss.

e.At every single step of the sales and confirmation process you FAILED to make me aware that the cover would not include the loss of my phone. I would argue that cover for loss is an integral part of mobile phone insurance and customers should be informed very clearly before they purchase that the insurance does not cover this in order that they can arrange more suitable cover.


2.When I tried to make a claim, your insurance provider’s call centre tricked me into claiming that the phone as lost so that they could reject my claim.

a.When I phoned the call centre they instantly started processing my claim as lost before I had a chance to explain I believed it had been stolen. I believe they did this as a tactic to reject my claim.


3.You have sold me an insurance policy that was not fit for purpose.

a.As a consumer I have now researched the mobile phone insurance marketplace and it is the NORM to cover customers for loss as well as theft – particularly at the extortionate monthly amount you insist on charging. To not include loss in the cover and not make customers aware at point of sale is extremely misleading and unfair because it would not be unreasonable for the customer to assume they would be covered for loss.

b.The risk of loss must be higher than the risk of theft so the insurance should surely cover me for the more common of the potential occurrences that I would need to claim for.


In order to rectify having mis-sold me insurance I want you to take the following actions IMMEDIATELY:



  • Send me a brand new replacement phone of the same or greater spec to the one I had
  • Switch my insurance cover to the same level of cover provided by Carphone Warehouse – because the reason I purchased it from you was because you led me to believe it would be the same level of cover.
  • Send me the detailed wording of my insurance policy IMMEDIATELY.
  • Update your website purchase process to inform customers before they purchase that they will not be covered for the loss of their phones so that nobody else has to bear this unfortunate situation.


I sincerely hope that you will be taking my complaint as seriously as I do. Just so you know how serious I am, I will be forwarding a copy of this letter to the Carphone Warehouse so they know you are misleading customers into thinking they are buying Carphone Warehouse services, to O2 to make them aware that you are misleading customers in order to get them to purchase their products and services and also to the Financial Ombudsman service so they can investigate your mis-selling practices.


Should I not get the response I am looking for I will also not hesitate to invest my personal time in detailing your misleading sales techniques and the appalling way you treat customers on every single consumer website there is. I will also be contacting BBC Watchdog.


I expect written confirmation that you have received and are looking into my complaint to the address at the top of this letter within the next 5 working days.

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What the 'norm' is - is actually irrelevant. You'd be covered for whatever the policy stated was the relevant T&C's. Different policies have different benefits, some offer financial cover should the phone be used to run up unauthorised calls. Loss, through the neglignece of the owner is often not covered, but id 'accidental' loss is added, it is. Clearly they are saying that this element of the policy did not apply, and before you can successfully claim is show the cover you had ACTUALLY bought (not what you thought you had).


Is remains the responsibility of the customer to read the policy (online, in an e-policy) to ensure it meets their needs. If it doesn;t then the time to query ths at the time, NOT after a claim.

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