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.
