With more mobile phone carriers and distributors promoting mobile phone warranty plans for accidental damage, the Consumers’ Foundation cautioned the public that the plans are not government-regulated and might not guarantee consumers the protection they thought they had paid for.
Promotional phrases such as: “Mobile phone insurance — if it cannot be fixed then just replace it with a new one” or “If you purchase insurance for your mobile phone, you do not have to worry if it falls in water or if it is smashed,” can mislead consumers, the foundation said.
Having visited two mobile phone carriers and three distributors to gain an understanding of their accidental damage warranty plans, the foundation said the plans are not reviewed by a particular governmental agency nor regulated by the Insurance Act (保險法), because they are sold as a “warranty.”
The warranty plans ranged from NT$98 to NT$258 per month or NT$450 to NT$4,800 per year for different mobile phones.
Wei Yi-lung (魏憶龍), a committee member of the foundation’s financial insurance committee and an attorney, said a warranty should be attached to a sold product rather than sold as an additional service, so accidental damage warranty plans should be considered insurance plans regulated by the Financial Supervisory Commission’s Insurance Bureau.
“Companies often exaggerate the benefits of the plans, but when the phones are damaged, they can act as the judge to arbitrarily determine whether the damage was intentional or accidental,” the foundation’s acting secretary-general Chang Hung-ju (張宏如) said. “We think this is unfair to consumers.”
The foundation said warranty fees remain the same while phones usually depreciate in value after one year.
Three companies do not allow termination or refund of the plan and two companies collect monthly warranty fees along with monthly phone bills, the foundation said.
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