Motor warranties alleged to have been sold without insurer's consent
Merseyside Police are investigating a suspected major fraud by a motor warranty broker, that has left thousands of customers with invalid policies.
It is also alleged that the broker defrauded an underwriter of an estimated £50,000.
A spokesman for Merseyside Police confirmed that following a complaint made by United Kingdom Insurance (UKI), it was investigating the business dealings of the now dissolved Southport company Nationwide Warranties (NWL). The inquiries are continuing.
Two years ago, NWL used UKI to underwrite its policies. A UKI employee confirmed that NWL was not accounting fully to UKI and was selling insurance without paying its underwriters.
UKI terminated NWL's contract in November 2000 when it conducted an audit and discovered some alleged financial anomalies. But NWL allegedly continued to sell products for nine months after its contract had ended.
According to a market source, NWL used the unspecific phrase "certain insurers" to state who underwrote the policy certificates after the contract termination. UKI lodged a complaint with the police early last year.
One source said it was difficult to quantify the amount of money involved because the company would only know that, if and when claims came through.
"There may be members of the public here who have suffered considerable loss, so there is obvious public interest in this case," he said.
