The Financial Conduct Authority reported it has found “serious and widespread issues with insurance policies sold to shoppers in stores and garages.”
Sales representatives had mis-sold insurance rules and regulations leading to the mis-selling of consumer product insurance to millions of consumers. According to observers the scale is possibly on par with mis-sold PPI. They added it may incite a PPI-style refund system in the near future.
Currys, PC World and Tesco, three of these companies that UK consumer group Which? once said to have misled millions of consumers to have sold an unnecessary product policy for products, have had staff who had mis-sold the warranties by using “hard sell” tactics and misleading claims on policy coverage.
Analysts said that the incident is similar to payment protection insurance mis-selling and showcases the possible future vulnerability of consumers against companies and advantage-seeking sales staff.
Being similar to mis-sold PPI, analysts mentioned three factors that often lead to mis-selling: high product volume to sell, poor salesperson education and the lack of incentives to motivate salespeople to sell the proper insurance to consumers.
The new UK insurance scandal is the second of its kind in the United Kingdom. Packaged bank accounts, wrongly-sold payment protection on mall-issued cards and UK’s new pension laws are possible financial scandal holes in the country.