Satellite warranties firm switched off
A LIVERPOOL-based group of companies which sold warranty cover for satellite TV systems have been closed down in the public interest.
The Financial Services Authority obtained a High Court ruling appointing provisional liquidators to the businesses – Digital Satellite Warranty Cover Limited (DSWC), Satellite Services (Satellite) and Nationwide Digital Satellite Warranty Services (Nationwide Digital) – after they were judged to have been selling insurance without authorisation.
The companies were operated by Bernard Freeman and Michael Sullivan, and offered BSkyB’s satellite TV customers a form of extended warranty.
In return for an insurance premium of between £6.49 and £11.49 per month, these 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.
The FSA said the 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 have ever been authorised by the FSA.
As part of the action, the authority is now seeking to wind up DSWC, Satellite and Nationwide Digital.
With the support of both the provisional liquidators and the FSA, and as sanctioned by the High Court, Sky has written to all customers who had a warranty with DSWC, Nationwide Digital or Satellite to confirm that it will provide free support to any affected customer who needs either a repair or service visit.
Dan Schwarzmann and Toby Underwood of accountancy firm PwC have been appointed as joint provisional liquidators.
