DTI warns of fake motor insurer

The Department of Trade and Industry yesterday declared Eastern Star Motor Policies to be a fraudulent insurer and said any motorists with cover issued by the "company" should seek alternative cover.

A man has been arrested and released on bail in connection with the fraud, said a police spokesman.

The DTI said that Eastern Star claimed that its policies were underwritten at Lloyd's of London and gave a non-existent address in Gracechurch Street in the City of London as its offices. A spokesman for the Lloyd's insurance market has denied any connection with Eastern Star.

The policies were sold through SOS Insurance Services, which claims as its base a residential address in East London.

A spokeswoman for the DTI said: "We know of about 50 individuals who have got Eastern Star policies so far. It could be a much bigger number."

A police spokesman said yesterday: "A man was arrested last week in connection with this matter by Leyton CID and he is being investigated in connection with the suspected selling of bogus insurance policies."

He is due to return to Leyton pending the outcome of a report to the Crown Prosecution Service.

No charges have yet been brought against the man, said the spokesman.