Indexia to be sued soon for “deceptive marketing practices”

“I took out SFAM (ex-Indexia) insurance for a phone for 15.99 euros/month in 2016 in an SFR room,” says Isabelle, who works in marketing and wishes to remain anonymous. In mid-2022, it was warned of “questionable” samples. She realizes that several companies belonging to Indexia are charging her three to four times a month under different titles for services she claims she did not request. In six years, the 50-year-old says she has been charged around €10,000 and received €4,000 in refunds after “harassing” customer service.

“My mother bought a phone in 2016 for 68 euros… In the end it cost her more than 4,000 euros,” says Gil Grosson. After requesting in June 2022 to send the contracts corresponding to the direct debits, he said he realized the signature on the original contract and direct debit mandate was not his 77-year-old mother’s signature. “These are scribbles,” and the email address to which Indexia would have sent the endorsements “doesn’t exist,” he adds. The charges went from 3.90 euros/month to almost 180 euros before Postbank blocked them for the pensioner.

After “revolutionizing” multi-risk telephone insurance and creating a service group of 3,000 employees in Europe, Sadri Fegaier, 43, and several companies in his Indexia group will soon appear before the Paris Criminal Court for “deceptive commercial practices”, according to Paris prosecutors. This lawsuit follows another fraud investigation that found such practices. The first had resulted in a criminal transaction accompanied by a fine of around 10 million euros, according to concurring sources. If the facts are proven, Sadri Fegaier faces two years in prison and a fine of 300,000 euros, but he says he is “calm”.

A group of 3,000 employees

The group is little known to the public, but its brands are nevertheless part of the daily life of millions of consumers through 2,500 points of sale in Europe: SFAM and Celside (insurance of multimedia products), Cyrana and Foriou (discount programs), Serena, Hubside .. .“It started with SFR franchise stores”, a BTS insurance in the pocket, recalls a partner. He is “fascinating, extremely quick, extremely intelligent. He is not flamboyant like Bernard Tapie, but there is something of that”. After marketing his insurance to Fnac in France between 2017 and 2019, Sadri Fegaier discreetly bought 11.35% of Fnac-Darty for €335m via SFAM, Indexia’s ancestor. Then Indexia opened multimedia stores in 2020: Hubside Stores. The group wants to become a leader in refurbishment and is developing in the rental of devices (drones, electric scooters, etc.), aiming for 500 Hubside Stores by the end of 2023, against 130 currently.

Since its creation in 2010 in Romans-sur-Isère (Drôme), its business volume has increased from a few million euros to more than a billion. 2023 target: 1.26 billion euros. Sadri Fegaier proudly shows a set of teleconsultants in Romans-sur-Isère, his hometown, where he had a glass complex built with a minimalist interior, almost blinding white. Most of the employees are young, dressed to the nines and far better paid than in the rest of the profession. Indexia is “the second private employer in the city”, according to mayor Marie-Hélène Thoraval, who welcomes the “dynamism” that young employees bring to this city, bruised since the end of its shoe industry. Sadri Fegaier “is proud of succeeding in hiring people whom he believes French society does not give them a chance, emphasizes a partner. From this point of view, he is very endearing”.

First survey conducted by DGCCRF

These showcases (and products) allow it to sell its services to some 8 million claimed “management clients” and to “master the client from A to Z,” says Sadri Fegaier, who has turned 58e French professional wealth according to Ranking of Fortunes Challenges. Some of his partners are increasingly cautious. Fnac-Darty thus did not want to renew the contract in France and Spain. The “financial conditions” for Fnac “did not suit us”, replies Sadri Fegaier.

The end of this partnership came after the Directorate-General for Competition, Consumer Affairs and Fraud Prevention (DGCCRF) launched an investigation in 2018. It concluded, following a search in October 2018, that “the sales method used in the marketing of the SFAM group’s products (SFAM Insurance and Foriou Loyalty Programme), constitutes an offense of deceptive trade practices”.

To avoid a lawsuit, the group had agreed in June 2019 to compensate customers who requested it within three months and to pay a fine as part of a criminal transaction. It is around 10 million euros, according to a source familiar with the matter. DGCCRF estimates an amount that is in reasonable proportion to the seriousness of the practices. A “rare” sum, points out Raphaël Bartlomé, head of the legal department of UFC-Que Choisir.

“It’s a calculation they make in relation to the turnover,” says Sadri Fegaier, pointing to the time of the opening of the investigation: at the beginning of 2018, his activity is booming and the fund he invested in, Ardian has joined a Rothschild fund in the group’s capital. They are followed throughout the year by the Caisse des dépôts et consignations, a public institution, and the Emirati sovereign wealth fund Mubadala. “We took note of the criticism that was made, knowing that the contracts were made with our distributors (…) Today it is us at the Hubside Store who make the sales,” he continues.

Hundreds of new reports

But the reports are still numerous and also concern Hubside stores. With the proliferation of testimonies in more than a dozen media and on social networks, UFC-Que Choisir indicates that it has received “almost 500 new reports” since September. Insurance broker Arnaud Chneiweiss claims to receive “hundreds of complaints” disputing “the desire to take out insurance” regarding several companies, including Indexia, which he identifies “among the players that pose a problem”. In order for there to be a trial against Indexia, at the end of November, lawyer Emma Leoty filed a summons before the Paris court for a common class action that brought together 61 cases. She claims to receive calls “almost every day” from consumers from all walks of life, sometimes “choked up” by the samples.

Master Leoty obtained a first conviction in July for a man who was withdrawn from more than €9,000 in ten years. This pensioner, who wishes to remain anonymous, claims to have received refunds “as randomly as direct debits” totaling around €7,000, some of which were obtained “just before the hearing”. “We have not been judged,” Sadri Fegaier said first, before acknowledging, several times, this sentence of a thousand euros in damages and court costs. His lawyers appealed. Very few customers remain unsatisfied, he insists, emphasizing winning “two million new customers every year at European level” and highlighting its quality control. But “how many French people are sampled without knowing it?” asks Maître Leoty.

No court date yet

Nothing seems to shake the group, which saw telecommunications expert (Altice, SFR) Alain Weill (434)e Professional wealth according to Challenges) joins the board at the end of November. However, right after the criminal transaction, the DGCCRF opened another investigation and reports continue to flow. “All the better for the DGCCRF to carry out checks,” says Sadri Fegaier. His right-hand man Jean-Pierre Galera adds to this by saying that this is the case for “all the big companies that deal with very, very large volumes”. The DGCCRF states that its second investigation “has revealed practices that consist in misleading consumers who want to stop direct debits, cancel their subscriptions and get refunded the amounts deducted after the termination of their contract, that their requests were taken into account. even effective”.

The DGCCRF forwarded the case to the judicial authority, and the Paris prosecutor’s office announced at the end of August that several companies in the group and the CEO would appear for “deceptive commercial practices” before the Paris Criminal Court. A hearing date has not yet been set. Sadri Fegaier claims not to have (yet) been summoned to appear. “The goal today is precisely that the case makes a lot of noise, that there are many articles and media about it, I tell you that there is no need to make a big deal about it,” he says. I am very calm. “.

According to concurring sources, there are so many people who are civil parties in the lawsuit that the selection of a hearing date has been postponed until everything is recorded. Sadri Fegaier, he does not shy away: “You know, the criticism, we will always have them, but the only thing that will be able to answer them is to last over time”.

(with AFP)

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