AUTHORITIES are investigating a Shanghai firm for selling “broken screen” insurance for mobile phones by claiming it is a partner of the People’s Insurance Company of China, and then not paying out.

More than 500 consumers bought insurance from the Shanghai Yingmeng Network Technology Co, also known as Hi Repair.

More than 10 say their broken screens were not repaired.

They paid up to 119 yuan (US$17.30) for six months to a year and say the company promised screen replacement, in writing.

The firm said it was an partner of PICC Property and Casualty Co, which PICC denies.

The Shanghai Consumer Rights Protection Commission has said the insurance sold by Hi Repair was simply an extended warranty.

The commission said the company refused to repair screens, saying the service had been terminated. But customers believed they had bought insurance for broken screens.

One complainant, Putuo District customer Huang Bingjie, bought six months’ insurance for 79 yuan in October.

“I was told that the firm has terminated cooperation with PICC when I asked for a screen replacement last month, and it said it would provide full refund of the insurance, but I want a free replacement,” Huang said.

Another customer, Xu Shuang, said his screen was broken when he dropped his phone this month.

“Hi Repair asked me to contact PICC, whose consumer service staff said they had no cooperation with the company,” Xu said.

“PICC broken screen insurance is a lie by the company and I now demand a solution,” he said.

Commission deputy secretary-general Tang Jiansheng said yesterday the company falsely promoted its product, although the investigation is continuing.

“It misleads consumers with its dishonest act,” Tang said.

Hi Repair denies the allegations and has told the commission it will respond with details.