Motorcare warranties firm collapse leaves customers out of pocket
Financial regulators are investigating the collapse of a car warranties firm which they say has left some customers with worthless policies.
A BBC Wales investigation found some policies sold by Motorcare Elite (2008) were not backed by underwriters.
The Llantwit Major-based firm was set up by Harby Panesar, who appeared on TV when he spent a reported £20,000 on his daughter's birthday party.
Now bankrupt, he insists the policies were properly underwritten.
The BBC Wales consumer affairs programme X-Ray found that Motorcare Elite (2008) sold car breakdown warranties to car dealers who sold them on to consumers.
The company said they were backed by insurance underwriters, but after the firm collapsed it emerged that some policies were not backed by insurance and were worthless.
The Financial Services Authority (FSA) has issued a statement saying: "If you were a customer of motor breakdown insurance firm Motorcare Elite, there is the possibility you were sold a policy which has now turned out to be worthless.
"Information we have seen suggests that when Motorcare sold some policies to customers, it may have failed to properly register their details and premiums."
A three-month investigation by X-Ray found that the company appeared to have made up the names of insurance underwriters.
Some policies were backed by a company called Marine and General Insurance Company Ltd at an address in the city of London.
But researchers for the programme could find no trace of the company.
Mr Panesar now says the company is based in Kazakhstan.
Adrian Reynolds from Cwmcarn was a victim of the collapse of Motorcare, having bought a £700 life-of-ownership policy for a Nissan pick-up truck bought at auction.
When Mr Reynolds tried to claim for repairs costing more than £1,200 he found underwriters Alpha Insurance had no record of the policy he had paid for.
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The BBC Wales consumer affairs programme X-Ray found that Motorcare Elite (2008) sold car breakdown warranties to car dealers who sold them on to consumers. The company said they were backed by insurance underwriters, but after the firm collapsed it
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