Regulators have told a supplier of warranty products to vehicle and equipment makers to remove potentially misleading statements from its website.

The Australian Securities and Investments Commission (ASIC) says National Warranty Company (NWC) has “agreed to remove statements… that implied that being regulated and licensed by ASIC would assist future claims by consumers”.

The commission was concerned the statements might suggest holding an Australian financial services licence and being regulated by ASIC meant NWC was more likely to exercise its discretion to pay on valid claims.   

“The discretionary nature of these products means a consumer may not be able to rely on them to cover a risk in the future,” ASIC Senior Executive Leader Deposit Takers, Credit and Insurers Michael Saadat said.

He says a financial services licence does not provide a guarantee.

NWC provides warranty products that are classified as “discretionary risk products” under the Corporations Act. Unlike with insurance, providers have discretion as to whether to pay a valid claim, ASIC says.

The statement removed from the NWC site said: “This reputation, together with regulation by ASIC and the Australian financial services licence, go a long way in assuring our customers that the products they purchase today will be there to assist them if needed in the future.”

NWC is the trading name of Davantage Group, a subsidiary of specialist insurance, warranty and finance company Presidian.