Conn. Senator Urges DOJ to Investigate Auto Insurers’ ‘Preferred’ Repair Shops

U.S. Senator Richard Blumenthal (D-Conn.) is urging the Division of Justice (DOJ) to investigate a lately aired CNN report’s allegation that auto insurers may possibly be pressuring shoppers to repair their automobiles at the insurers’ preferred repair shops.

“Contrary to what shoppers could be led to believe by their insurers, repair shops preferred by insurers do not necessarily equate with top quality repairs,” Blumenthal wrote in a letter sent to U.S. Attorney Common Eric Holder last Friday.

“It appears to be frequent information among auto repair shops that the greatest way to land a coveted spot on an insurer’s preferred list is not necessarily by delivering constant, top quality service, but by agreeing to charge under-market labor rates and use cheaper, salvaged, utilized, or even counterfeit parts of questionable good quality and security,” Blumenthal wrote.

“Unfortunately, numerous buyers are also being misled into pondering that they are required to have their car repaired at one particular of these shops,” Blumenthal wrote in the letter. “This has the harmful impact of limiting consumer choice, producing a critical safety danger, and suppressing competition in the auto repair business.”

The following is the full text of Blumenthal’s Feb. 20 letter to Lawyer Common Holder:

The Honorable Eric Holder

Lawyer Basic of the United States

Robert F. Kennedy Constructing

950 Pennsylvania Avenue NW

Washington, DC 20530

Dear Lawyer General Holder:

As a longtime advocate of consumer decision, I create to bring to your consideration to troubling new evidence that our nation’s top auto insurers continue to engage in anticompetitive and possibly illegal tactics to stress shoppers into repairing their automobiles at insurer-preferred repair shops. As uncovered in a special investigation featured on Anderson Cooper 360 Wednesday evening, insurance steering not only undermines a fundamental consumer appropriate, but can also compromise the security of autos on our nation’s roads—endangering motorists and their passengers.

I urge the Department of Justice (DOJ) to instantly investigate such practices by the auto insurance coverage industry and act swiftly to safeguard the safety of consumers and preserve competition in the auto repair industry.

As junk yard, remanufactured, and utilised components of substandard quality grow to be increasingly widely available, auto insurers are adopting alarming new ways to save money at the expense of customer security. Contrary to what customers may be led to believe by their insurers, repair shops preferred by insurers do not necessarily equate with high quality repairs. It seems to be widespread expertise amongst auto repair shops that the ideal way to land a coveted spot on an insurer’s preferred list is not necessarily by delivering constant, quality service, but by agreeing to charge beneath-market labor prices and use cheaper, salvaged, employed, or even counterfeit components of questionable good quality and safety. Sadly, many consumers are also getting misled into thinking that they are essential to have their auto repaired at one of these shops. This has the dangerous impact of limiting customer decision, creating a serious security threat, and suppressing competition in the auto repair business.

According to a 1963 consent decree with the DOJ, a number of insurers had been ordered to stop: “sponsoring any appraiser directing, advising or otherwise suggesting any person or firm do enterprise with any independent or dealer-franchised automotive repair shop exercising handle more than the activities of any appraiser and fixing or otherwise controlling the costs charged by automotive repair shops for the repair of harm to the car or for labor in connection therewith, by use of a flat rate.” Over 50 years have considering that passed, and consumers and auto repairers possibly stay victims of the very very same misconduct insurers were directed to quit undertaking decades ago.

I urge the DOJ to investigate and make a determination as to no matter whether such practices violate the 1963 consent order or any other present federal laws. As you investigate this matter, I urge you to use your authority to investigate the contents of contracts between insurance coverage firms and facilities listed in their direct repair applications or preferred lists. I would also like to request an update concerning DOJ’s understanding of the existing signatories of the 1963 consent decree and whether they continue to be bound by the consent decree in light of business transactions in the years because the decree was signed.

Thank you in advance for your prompt interest to this important matter harming buyers and the auto repair sector, and compromising automobile security.

Sincerely,

RICHARD BLUMENTHAL

United States Senator

 
Associated Articles:

• West Virginia Judge Dismisses Components Suit Against Physique Shop, Liberty Mutual


• Oklahoma AG Warns Against ‘Steering’ to Repair Shops by Insurers


• Louisiana AG Files Suit Against State Farm Over Auto Repair Practices


• Indiana Body Shops Sue Insurers over Compensation for Automobile Repairs

Conn. Senator Urges DOJ to Investigate Auto Insurers’ ‘Preferred’ Repair Shops