Motor Codes withdraws warranty support
* Warranties no longer endorsed * Money put aside could go to creditors * if provider enters administration...
Motor Codes has withdrawn its endorsement of vehicle warranties while it investigates the support offered to motorists should a warranty company go into administration.
The automotive industrys self-regulatory body said a recent case highlighted the fact that the money put aside to pay for warranty claims could not be guaranteed if a company goes into administration.
As a result, Motor Codes has temporarily suspended its Vehicle Warranty Products code of practice and says it cannot currently endorse any warranties.
Subscribers to our warranty code commit to protecting policy payment funds, said Chris Mason, Motor Codes managing director.
If a court-appointed administrator makes this unenforceable, by not recognising the separation of funds set aside for claims payments, customer protection is in question.
Motor Codes is looking for a way that the money put aside for warranties could be protected in the case of a company going into administration, but was unable to give a timeframe for when this might happen by. It is consulting the Office of Fair Trading and industry stakeholders to resolve the matter.
In the meantime, Motor Codes says it is still available to give advice on new warranties, and it will honour its commitment to helping people with disputes before December 9.