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Saturday Money: Phones 4u collapse could pull plug on cashback promises: Telecoms But better news for holders of its insurance, as Rupert Jones reports(Guardian (UK) Via Acquire Media NewsEdge) Thousands of Phones 4u customers who signed up for cashback deals may lose most, or all, of the money they are due after the retailer collapsed into administration. However, there was better news for the estimated 800,000 people who have the firm's mobile phone insurance. Phones 4u shut its 550 stores on Monday, hours before the company was put into administration, leaving nearly 5,600 jobs under threat as a row raged over who was to blame for the chain's demise. The group's insurance division and mobile network, Life Mobile, have been put into administration as well. Phones 4u also had an online-only operation called Dial A Phone, and that, too, has been shut down. In terms of the impact on customers, the initial noises were positive: consumers were told that any mobile contracts bought through Phones 4u in the past will remain unaffected. But as the week went on, it emerged that in the run-up to the retailer's collapse, a significant number of people took out mobile phone cashback or so-called "redemption" deals, where they would receive money from Phones 4u either in a single payment, or several instalments. It appears that as recently as last Saturday, Phones 4u was offering a pounds 50 payment on a date in the future, to tempt customers. However, some people are owed larger sums - in some cases, several hundred pounds. One worried customer contacted the Guardian to say they had signed up to a contract where Phones 4u would send them a cheque for pounds 40 every three months after they had had the phone for a certain period. "The full amount was for pounds 240, and there is still pounds 160 owed," the customer said. They are far from alone. On the forum of website Digital Spy, one user, "Wali G", said he (or she) took out a two-year contract in July where they were due to receive five cashback payments of pounds 23.98 - a total of pounds 119.90 - between January 2015 and July 2016. A number of people signed up for cashback and redemption deals with the Phones 4u subsidiary Dial A Phone, which - until its website was taken offline - had described itself as "the UK's favourite online mobile phone store". A number of customers went on to its Facebook page to point out that they, too, were owed cashback. The problem is that the cashback element was separate from the contracts, and was paid by Phones 4u rather than the network. The Phones 4u website had carried small print stating that its redemption promotion "is a Phones 4u offer, and is separate from the contract agreed between you and your chosen network airtime provider". It appears these customers could end up becoming creditors of Phones 4u, and, if that happens, it is far from clear how much, if any, of their money they would receive. It might be a few pence in the pound, or nothing. But there was better news for customers paying for mobile phone insurance. Phones 4u's policies, Phones 4u Care and Premierplan, are underwritten by a completely separate company, London General Insurance, which is part of the Warranty Group. On Wednesday, it broke its silence: "We would like to reassure all policyholders with an active Phones 4u Care or Premierplan mobile phone insurance policy, that your policy remains in force in accordance with its terms and conditions." London General Insurance warned of "some short-term disruption to the normal customer service and claim processes" while it works with the administrator to get alternatives in place. Customers can call dedicated hotlines: 0333 222 6730 for those holding Phones 4u Care policies; and 0333 220 5466 for Premierplan customers. Captions: Bypass: redemption deals are unlikely to be honoured Photograph: Ray Tang (c) 2014 Guardian Newspapers Limited. |