The City watchdog has fined Carphone Warehouse £29.1m for mis-selling Geek Squad, a mobile phone insurance and technical support product. The company will pay a further £2.3m in compensation to customers.

The Financial Conduct Authority found the phone retailer failed to give its sales consultants the correct training to offer suitable advice to customers buying the product. It said they were trained to recommend it to customers who already had cover through their home insurance or bank accounts.

The watchdog carried out an investigation after whistleblowers raised an alert.

Between 1 December 2008 and 30 June 2015, Carphone Warehouse sold Geek Squad policies worth more than £444.7m, a large proportion of which were later cancelled.

Mark Steward, the executive director of enforcement and market oversight at the FCA, said: “The Carphone Warehouse and its staff persuaded customers to purchase the Geek Squad product, which in some cases had little to no value because the customer already had insurance cover. The high level of cancellations should have been a clear indicator to the management of mis-selling.”

Carphone Warehouse said it agreed with the findings and would not appeal. It has set aside £2.3m to compensate 28,000 customers it has identified of having potentially been mis-sold the policy (mainly those who cancelled) – amounting to an average payment of £80 per customer. As part of this voluntary compensation programme, it refunded £948,777 to customers in 2016.

If Carphone Warehouse – which is part of the listed group Dixons Carphone – had not cooperated with the watchdog, the fine would have been £41.6m.

The FCA said sales staff at Carphone Warehouse were trained in “spin selling”, which focuses on persuading customers to purchase the product with no training provided on how to respond if customers said the policy may not be appropriate. Sales staff were also trained in “objection handling”, focusing on overcoming customer objections rather than assessing whether the insurance was suitable for them.

One customer said she “did not really want it in the first place but they pressured you into getting it” while another said they were not aware they were purchasing insurance with the phone.

When customers complained, the company failed to properly investigate and fairly consider their complaints, the watchdog added.

Alex Baldock, the Dixons Carphone chief executive, said: “We’re obviously disappointed that Carphone Warehouse fell short in the past. But we’re a very different business today; as the FCA acknowledges, we’ve made significant improvements since 2015. We’re committed to stay on that trajectory and to make sure all customers enjoy the right technology products and services for them.”

In 2006, Carphone Warehouse was fined £245,000 for selling mobile phone insurance without providing key information to customers.