Three firms charged Sky customers up £11.49 per month for insurance premium with unlimited callouts

The Financial Services Authority (FSA) has obtained a High Court ruling appointing provisional liquidators over three firms that the FSA considers were engaged in insurance activities without FSA authorisation.

Digital Satellite Warranty Cover (DSWC), Satellite Services (Satellite), a partnership, and Nationwide Digital Satellite Warranty Services (Nationwide Digital) were operated by Bernard Freeman and Michael Sullivan

Each company offered BSkyB’s (Sky) satellite TV customers a form of extended warranty which constituted insurance.

In return for an insurance premium of between £6.49 and £11.49 per month, the firms promised customers unlimited callouts covering all parts and labour costs.

DSWC made a profit of approximately £10 million in the last 12 months and had a customer base of up to 200,000 people.

When it investigated Satellite’s accounts the FSA found that turnover reached £2.1 million in 2010.

As part of this action the FSA is seeking to wind up DSWC, Satellite and Nationwide Digital.

In a statement, the FSA said products described as warranties by the firms amounted to contracts of insurance and arranging and effecting contracts of insurance is a regulated activity.

None of the firms had been authorised by the FSA.