Aviva Canada, an insurance company, found out that workers employed at some auto body shops would deliberately damage vehicles, bill for towing that never happened, and create invoices for phantom repairs. What is even more shocking that only 1 out of 10 repair outfits acted honestly according to Aviva’s investigation.
Shocking Auto Repair Fraud
When you take your car to an auto repair shop, the last thing you expect is for workers to charge for things they didn’t do or to charge for damages they deliberately inflicted on your vehicle. Sadly, that is the norm for the auto repair shops investigated by Aviva Canada.
Aviva is current asking the government to step in and do something about the widespread fraud, including fraudulent billing for repairs that didn’t happen or billing for new parts but installing old ones. The insurance company found out that approximately half of the expenses filed for repairs to crashed vehicles are fraudulent. This amounts to loses of millions of dollars a year.
Aviva Canada’s vice president for fraud management Gordon Rasbach shared that no one has tried to find out the extent of fraud before and that the figures they gathered were truly an eye-opener albeit taken from just a small sample.
Aviva tried to simulate accidental situations involving private passenger cars by crashing 10 vehicles deliberately. They then hired experts to record the damages in detail and estimate a cost for repairs. They also outfitted the cars with hidden cameras and then had investigators pose as hapless drivers that have just gone through a crash using the vehicles.
Clear Fraud Findings
Rasbach shared that he was surprised that 9 out of 10 were dishonest and showed varying degrees of fraud, with fraudulent charges costing more than real repairs as in the case of a vehicle with an estimated repair of just $30,000 but was billed $61,000 by a fraudulent auto repair shop.
Aviva found out that auto repair shops commonly billed for towing vehicles despite that not happening, asked drivers to sign a blank work order, charged for new parts but installed old ones, and even maliciously inflicted more damage to the vehicles so that they can bill more.
The Real Effect
Rasbach shared that with the findings above, it is clear that there is a pervasive problem of fraud and that honest consumers are the ones paying for it. With cost of repairs so high, insurance companies charge more to their clients, an amount inflated by fraud in the auto repair shops.
It should be noted that auto-insurance premiums in Ontario are about double that of the Canadian average. There’s been some talks of the province establishing a serious fraud office too. This was meant to combat auto insurance fraud. Aviva’s investigations helped bring 3 fraudsters to justice in the past by uncovering information that led to their arrest.
The above just goes to show that proper investigation and gathering of evidence is essential in stopping fraud. If you’re not sure how to go about collecting information about fraudsters like Aviva did or if you need help preventing fraud in your business and personal transactions? Talk to us today!