Carphone Warehouse, the sole retail partner in the UK selling the iPhone on the O2 network, has been found mis-selling cellphone insurance in an undercover investigation for the BBC's consumer-rights programme Watchdog.  Prompted by shoppers frustrated by Carphone Warehouse staff's hard-sell tactics, researchers for the programme went undercover into stores; in three out of five they were told that, should they lose or have stolen their iPhone without taking out insurance, they would not only have to buy a replacement handset but sign up to a second contract.  In fact, the new iPhone would continue on the old contract.

In one store, staff - who are paid commission for selling insurance - informed the researcher that O2's cover was not as comprehensive as that of Carphone Warehouse, which is also untrue. 

"[There could be] some element of confusion among an isolated number of sales consultants" Carphone Warehouse statement

Nonetheless, the firm denied that it was regular practise to exaggerate the consequences of failing to take out insurance, claiming that the complaints received were not a "fair reflection" of general experience.