HC Deb 29 March 1984 vol 57 cc259-60W
Mr. Williams

asked the Secretary of State for Trade and Industry (1) what action he has taken to protect consumers who have paid for extended guarantee insurance;

(2) what action he proposes to protect the public from fraudulent or irresponsible extended guarantee insurance;

(3) if he will take immediate action to ensure the bona fides of firms currently issuing extended guarantee insurance via retailers;

(4) if he will issue immediate guidance to consumers to assist them in establishing the validity of extended guarantee insurance offers;

(5) if he is satisfied that adequate steps have been taken to protect the public from fraudulent offers of extended guarantees;

(6) if he will take steps to secure compensation for victims of fraudulent extended guarantee insurance; and if he will make a statement.

Mr. Fletcher

I refer the right hon. Member to my reply on 21 March to my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) at columns489–91.

Mr. Williams

asked the Secretary of State for Trade and Industry how many firms which offered extended guarantee cover have ceased trading; and consequently how many consumers have been left with worthless insurance.

Mr. Fletcher

Extended warranties or guarantees are offered for their products by a number of manufacturers or retailers. Some bear the cost themselves; others arrange insurance cover. My Department makes inquiries into any schemes coming to notice where the nature of any insurance arrangement is not clear.

Comprehensive information is not available about the number of insurance or other undertakings which have had some involvement with extended warranties and which have ceased trading.

I am aware, however, that since 1 January 1983 three companies with business connections and concerned mainly with domestic appliance warranties have gone into liquidation. One was an authorised insurer. It is not possible to say what losses will be suffered by members of the public as a result of these companies' operations.

I also know of five companies concerned with motor vehicle warranties which have ceased trading since 1 January 1983 following action by the Department. In four of these cases there appears to have been no loss to the public.