Thousands face travel cover woe

Thousands of people could lose their travel cover after the Financial Services Authority (FSA) took action against Whiteley Insurance Consultants.

The West Yorkshire-based firm was placed into provisional liquidation by the High Court at the FSA's behest.

The FSA told the court that Whiteley - a brokerage - was selling travel insurance which was not underwritten by an insurer, invalidating the policies.

The liquidators have set up a hotline, 08705 234803, for policyholders.

'Worthless cover'

Whiteley also traded as Kingfisher Travel Insurance and Kingfisher Insurance Services.

The very early indication from the liquidators is that thousands of people could potentially have invalid insurance Caroline Feltham, PricewaterhouseCoopers

The major concern, with one of the busiest travel weekends of the year approaching, is that many people who had bought travel insurance from Whiteley could now be left with worthless cover.

The High Court appointed PricewaterhouseCoopers (PwC) to act as provisional liquidators. It will deal with the affairs of the company ahead of a possible compulsory winding-up order.

PwC spokeswoman Caroline Feltham told BBC News that it was too early to say how many of Whiteley's policies are not underwritten by an insurer.

"The very early indication from the liquidators is that thousands of people could potentially have invalid insurance," Ms Feltham said.

Ms Felthan advised Whiteley's policyholders to call the special hotline and, if necessary, arrange new travel insurance cover.

Whiteleys employs 40 staff, all of whom are being kept on by the provisional liquidator on full pay.