Smartphone warranty leaves frustrated customers without their phones
Lynda Steele and Sandra Hermiston, CTV Vancouver
Published Monday, May 12, 2014 6:00AM PDT
Last Updated Monday, May 12, 2014 7:45PM PDT
An insurance company that provides extended warranties for smartphones is being accused of not honouring its promise to replace or repair customers’ devices.
When Deane McKamey purchased a smartphone at a Coquitlam Rogers store, she also bought insurance from Global Warranty Group, which promised to replace her device quickly if it was ever damaged.
Then in January, she dropped her smartphone into the bathtub. When she contacted Global Warranty Group she was told the company could not get her the phone, so it would issue her a cheque instead. But months later, there was still no sign of a cheque.
McKamey is not alone. Steele on Your Side has received several complaints about Global Warranty Group and the company gets a one-star rating on the consumer advocacy site ConsumerAffairs.com. Many of the reviews are from frustrated customers who are still waiting for replacement phones or cheques.
Consumer reporter Lynda Steele contacted the company on McKamey's behalf. Global Warranty Group's CFO, Andrew Schenker, told CTV News the delays are occurring because of dishonest Canadians making fraudulent claims.
"We send them a new phone and then they make a new claim or they say it's a lost phone and then they file for another lost phone. So there's a pattern," he said.
In fact, Schenker says in Canada, two and a half times the amount of money collected in premiums, goes to pay out claims. Because of that, all claims from Canada are now being investigated thoroughly.
McKamey also contacted her cell phone provider Rogers in hopes it could help speed things along.
"I phoned them, and they just wiped their hands of it. They said we will take $10 off your bill a month," she said.
But Rogers appears to have had a change of heart.
“We certainly understand their frustration. Customers bought these warranties in good faith with the understanding they'd be honoured and we want to make this right and ensure they're treated fairly," said Jennifer Kett, senior manager of media relations at Rogers.
Rogers has now ordered its dealers to help consumers with insurance from Global Warranty Group to get replacements or refunds quickly.
If they’re not willing to honour the warranties, Rogers says it will.
In McKamey’s case, Rogers contacted the dealership that sold her smartphone and ordered them to give her a new one immediately.
After CTV News contacted Global Warranty Group it also said it was changing some of its policies. The company has severed ties with up to a dozen smartphone dealers in Canada that it feels were encouraging consumers to lie and say they lost their smartphones, so they could get Global Warranty Group to buy them new ones.
Global Warranty Group has also decided to not sell warranties in Canada until it rewrites its policy to prevent fraud.
But the company does promise if you've made a legitimate claim, you will get what you're owed, it just might take a while to get through the investigative process.