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Letter to the Editor

Farmers Warns Consumers about Auto Body Fraud

Doug Ashbridge, director of claims investigations for Farmers Insurance, says while most auto body repair shops are legitimate, some have become suspect, with such after-the-fact complaints as: repairs that were never done but were charged to the customer; replacing damaged parts with old, used parts while charging customers for new ones; and repairs or replacement of undamaged parts at unnecessary cost.

"Compare the estimate with the actual repair bill and look at the line items on the repair bill," Ashbridge suggests. "Some of the stuff really stands out, like if the windshield is replaced but was never broken in the first place."

According to the Farmers statement, based on statistics in California, while combating fraud is nothing new to the insurance industry, auto body repair fraud has become a greater problem recently in certain areas of the country.

Last year, a California Highway Patrol investigation of 62 auto repair shops found 25 to be engaged in fraud activity, resulting in the arrests of 35 people for preparing false estimates for insurance claims.

According to California's Bureau of Automotive Repair, insurance companies in the state pay out about $3.2 billion for auto body repairs and an estimated 40 percent of repair jobs involve some type of fraud. Those costs affect what the consumer pays for insurance with between 5 and 10 percent of premiums resulting from fraudulent claims.

Ashbridge, who oversees 10 Special Investigation Units for Farmers Insurance, as well as a Special Operations Unit that focuses on organized fraud rings, says there was a significant increase from 2001 to 2002 in the number of charges law enforcement agencies brought against auto collision repair shops. He categorizes the auto body repair scams as "opportunistic fraud."

"It tends to ebb and flow," he says, "but we generally see increases in all types of fraudulent activity whenever there is a downturn in the economy."

These increases are making insurers even more vigilant in their efforts to crack down on fraud. At Farmers Insurance, for example, Ashbridge says the company has added more technological resources and shifted a number of investigators to its SIU unit.

While there are no guarantees that a shop is honest or dishonest, Farmers Insurance offers these tips for consumers when taking their vehicle to a collision repair facility:

• Look for plaques or certificates -- specifically Automotive Service Excellence (ASE) credentials -- recognizing the quality of the technicians, or signs showing membership to trade associations or recognizable automotive- related companies.
• The shop should be clean and well lit with modern, state-of-the-art equipment.
• Check the reputation of the repair shop by seeking information from people who have had work done there or by calling the Better Business Bureau.
• Always request a written estimate before any work is done on your vehicle. Repair shops, by law, must provide customers with a written that includes the cost of repair work, including parts and labor, and surcharges (if any).
• Review the invoice once the work has been completed. The repair shop cannot bill more than 20 percent or $50 more than the estimate states (whichever is less) and cannot bill for unauthorized work
• The repair shop must provide the customer with a copy of the invoice, offer to return all replaced parts and may not hold a vehicle if a customer refuses to pay for unauthorized work.

Farmers Insurance Group of Companies is the nation's third-largest Personal Lines Property & Casualty insurance group, headquartered in Los Angeles and doing business in 41 states.

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