The Welsh Liberal Democrat Assembly Member for South Wales West, Peter Black is demanding tough action over mobile phone insurance in the light of the recent Financial Conduct Authority investigation which found poor claims handling, poor sales practice, anti-customer exclusions in the small print, and poor product design.
Mr Black said: ""As around ten million people in the UK have mobile phone insurance, it's easy to see that ripping customers off would be big business for the unscrupulous.
"The Financial Conduct Authority investigation found far too many claims rejected on inadequate grounds. For instance customers aren't covered for loss or theft if it happens in "a place which is easily accessible by people you do not know".
One company was rejecting 41% of all claims. Others refuse to take claims other than in writing thus reducing the number of claims they get. Yet others refuse to take a claim if the customer hasn't used the phone for as little as a fortnight. Some even appear to operate a policy of refusing to pay out at first hoping that the customer will simply give up.
"The FCA has made a start in bringing these insurers to heel by fining one company £2.8 million for the way they treat customers. They should continue to hand out large fines until similar companies come to heel.
"In the meantime, unhappy mobile phone customers should complain to the Financial Ombudsman Service, which is upholding seven out of ten customer appeals at present, and those thinking about taking out such a policy should think about cheaper alternatives. For instance, many household insurance policies will cover mobile phones."