Cold calling firms mis-selling appliance cover are conning
vulnerable people into signing up to extortionate direct debits -
charging some victims thousands of pounds to insure appliances
they do not even own, according to Which?.
Direct debit is a trusted way to pay for bills, subscriptions and
ongoing services, but Which? found that unscrupulous companies
are using it as a stealthy way to get people to part with their
money without realising.
A survey of more than 1,300 Which? members found that almost a
quarter received unexpected calls about home appliance insurance
or extended warranties within the last year.
Which? heard reports that callers lie to victims, telling them
their existing cover is expiring, even though they do not have a
policy, or call claiming to be another well-known company.
Callers usually have access to personal information that makes
their targets believe the calls are genuine.
They work by pressure selling invisible and easily forgotten
products that require a regular monthly charge. Then they sit
back and hope the £10 or £20 leaving their victim’s account month
after month will not be noticed.
One 92-year-old grandmother paid out £10,000 over a two-year
period to multiple firms claiming to be providing breakdown cover
for her washing machine and boiler – as well as a dishwasher she
does not own.
Despite having a call-blocking service with her phone provider,
it turned out she had been hounded by cold callers telling her
she needed to renew various policies she did not have. Believing
their lies, she had repeatedly given out her bank details.
Her granddaughter Fran shared details of 25 firms that either
charged her grandmother monthly or repeatedly pestered her with
nuisance calls. They claimed to be offering all sorts of
services, including cover for blocked drains and loyalty
schemes.
The company websites use templates and look strikingly alike, and
many of the firms are based in or linked to Bournemouth and
Poole. Callers tend to use one company name on the phone, while
another appears on bank statements – so it’s impossible to tell
who is calling.
Some of the Bournemouth-linked companies that targeted Fran’s
grandmother crop up time and time again in reports to Which? for
allegedly cold calling and misleading people into handing over
their bank details.
They include KG Assist, which is linked to Home Utility Services
Ltd, and Appliance Cover UK (now dissolved) through its former
directors, who also have links to telemarketing firms that say
they specialise in data leads.
Which? reported its findings to National Trading Standards, which
is investigating these companies.
If a direct debit has been set up without your permission, or you
have been duped, you are entitled to claim all your money back
from your bank. Most of the people that have reported this to
Which? have been refunded, but it can be time consuming and a
hassle.
Thanks to the direct debit rules and the intervention of Fran her
grandmother has been refunded most of her money and hopes to have
it all by the end of the year.
A big issue in the fight against cold calls is that telemarketing
companies are freely selling sensitive data, and the companies
buying it are abusing it. Trading Standards is working with the
Information Commissioner’s Office (ICO) to tackle companies
making sales calls without permission to use the data. But the
ICO only has powers to disrupt these companies by fining them for
breaches, rather than prosecuting them.
Which? urges people not to buy from cold callers selling
appliance cover or any other type of insurance. Consumers
interested in appliance cover should purchase this proactively
from regulated firms. Anyone cold-called about appliance cover
could ask for the company name and report it to ICO if it’s not
regulated.
Anyone who is inundated with cold calls, or has family members
plagued by this issue, can also ask the phone network if it
offers any call blocking services, some of which are free of
charge. If a direct debit has been set up without permission, or
someone has been duped, they are entitled to claim all their
money back from their bank.
The consumer champion also wants to see landline providers being
more transparent about the call blocking services they offer.
Which? wants providers to include their existing, free
protections within landline packages by default.
Gareth Shaw, Which? Head of Money said:
“Our investigation exposes how a network of unscrupulous firms
are targeting vulnerable people - in some cases charging
thousands of pounds to cover appliances that don't even
exist.
“If you or someone you know has been cold-called about appliance
cover, ask for the company name and report it to ICO. If you are
being inundated with cold calls, ask your phone network if it
offers any call blocking services.
“We also want to see landline providers offering more clarity to
their customers about the call blocking services they offer, and
we call on providers to include their existing, free of charge
protections within landline packages by default. Consumers should
not have to opt in to be protected from unwanted cold calls."
Notes to editors
Research
Which? surveyed 1,394 members of its online panel between 7th and
12th October 2021.
How to stop nuisance phone calls
-
Report a nuisance call: If you are
receiving nuisance calls or unwanted texts from a company or a
number, there are a range of organisations you can complain to.
These include the Telephone Preference Service (TPS), your
phone operator, Ofcom (which covers silent and abandoned calls)
and the ICO.
-
Register with the TPS: If you're
receiving unsolicited phone calls, you should register with the
TPS. The TPS is free to use and is a register which records
your preference not to receive unsolicited sales or marketing
calls.
-
Talk to your phone company: If you're
still receiving harassing or unsolicited phone calls, you can
talk to your phone company to report the phone number. Most
providers offer products, services and advice - much of which
is free - to block unwanted calls or reduce nuisance calls.
-
Don't consent to be contacted: If you're
registered with the TPS, third parties are not allowed to call
you but some companies still do so. Third party marketing is
when your details are sold on to numerous other companies for
marketing purposes. Look out for tick boxes that request
consent for your details to be passed onto third parties.
-
Consider call blocking technology: Phone
companies offer a number of services that can help block
unwanted nuisance calls. Some of these services are free but
for some, monthly charges can apply, and may vary depending on
what package you're signed up to.
Right of replies
KG Assist and Home Utility
Services Ltd were approached for comment but
neither firm responded to questions in relation to the
investigation.
