Competitors bullish after collapse of United Warranties

By Claire Reilly

Following last week’s collapse of third-party warranty company United Warranties, several warranty providers have come out to offer their products and services to affected United customers and to defend the state of the industry as a whole.

Managing director of The Warranty Group Australasia, Scott Grimshaw, commented that the downfall of United was an unfortunate example in an otherwise solid marketplace.

“Unfortunately the warranty industry can at times be subject to criticism due to unethical operators not honouring their obligations and paying out on claims,” said Grimshaw. “Prudentially regulated entities pride themselves on their strong reserving, claims payment ability and the support this gives to their retail business partners’ warranty programs.

“At The Warranty Group, we have provided approval to 98 per cent of customers who have lodged a claim this year.”

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Both National Warranty Services (NWS) and online electronics retailer Kogan.com have also come out to fill the gap left by United Warranties, with NWS offering warranties for whitegoods and Kogan offering warranties on TV purchases made at competing retailers.

“As our focus and speciality was always on IT and other consumer electronic products, we always put whitegoods warranties in the ‘do later’ basket,” said Don Card, general manager of NWS. “Whitegoods warranties need a totally separate service channel, and the parts and service costs are quite different.

“But this vacuum created by United has forced our hand sooner. In response to all the enquiries by whitegoods resellers who unfortunately decided to use United warranties, we have launched NWS whitegoods warranties.

“Our whitegoods warranties offer Australia-wide local on-site service, high priority same day response and instant parts replacement, for up to five years. And as always, our service quality and responsiveness will be superior to that offered by United Warranties."

The founder and CEO of Kogan.com, Ruslan Kogan, also said his company would offer to step in and provide warranties on televisions, regardless of where the product was original purchased. The bullish CEO also took the opportunity to take a swipe at retailers who had used United Warranties for after-sales service.

“Six years ago, we used United Warranties in our first year of operation,” said Kogan. “We quickly outgrew the service and built our own Australia-wide warranty network. Now, all warranties sold at kogan.com carry the full faith and credit of our company – meaning we do not farm out our responsibilities to third-party providers.

“Customers who, in good faith purchased warranties from our nation’s biggest retailers, believing that the warranty would be honoured, should not be left hanging in the air.”

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