Do we in the retailer part of the auto glass industry ever get upset when fraud gets revealed in a criminal manner? Does one take it personally when a shop owner is arrested and indicted for some sort of insurance scam or con? Or do we start to whistle like we are passing by a cemetery thinking better them than me? Such is the state of affairs within auto glass.
There have been three widely publicized cases in the past few years which involved shops installing generic glass but billing insurance companies for the much higher priced dealer purchased product. The tip of an iceberg I suppose. Not only is it stupid and fraudulent, all those actions do is to provide insurers with an excuse to limit claim provisions and policies along with interfering with the retailer -customer relationship. Take State Farm’s actions after the Florida fraud case was revealed; they generally have stopped paying for OE glass. Now a policyholder has to take his/her case up through State Farm’s corporate claim ladder if he/she wants eligible payment for dealer-purchased glass. I have had several angry and persistent customers take that route and have success. It is easy to motivate a Porsche owner to do so when his only aftermarket option is to install Chinese glass into his beloved late-model Carrera. The end result, however, has been a precipitous reduction of OE glass sales.
Direct marketing has been used by retailers since the birth of our industry. Many of us have used mailers, coupons and salesmen to generate consumer awareness and contact. Today it seems, some shops have increasingly crossed the line to unethical conduct and fraud by the use of pressure tactics on the public. We have seen two typical scenarios usually involving windshield repair.
The first is where a “technician” stands by a car wash or a gas station pointing out small cracks or even pits on customer’s vehicles and touting “free” repairs. It has been reported that many of these repairmen erroneously suggest that a windshield may “fall in” if a break or even a pit is not addressed. If a customer accedes to a repair, his insurance info is what qualifies him for a “free repair,” and the insurer then is invoiced and billed. It has been cited by fraud units of insurers that many times these charges can be unneeded, excessive and repetitive.
The second pressure tactic is where teams of door-to-door salespersons flood a neighborhood and make outlandish statements to a vehicle owner about the state of their auto glass. These sales people oftentimes are paid on commission only if they can conjure up repair or replacement appointments, which has lead to several reported incidents of unwanted or unneeded installs or repairs
Both of these schemes seem to target the elderly since they are most likely to have comprehensive insurance and be more trusting or less alert to fraud.
The overall effect has been twofold. State Farm, again, took the expansive nuclear approach of waiving deductibles for windshield repair. Other insurers have started to inspect glass damage prior to approval. However, many times those inspectors are employees of their contracted glass claims administrators who have every intention of relieving the reporting shop of the claim by doing the work themselves, thus controlling costs and exposure for the insurer. A perfect example of one company directly benefiting from the misdeeds of another and thousands of innocent shops are affected negatively.
Is sub-contracting a fraud? In today’s cyber world, a single desktop and numerous phone lines can pose as a regional or even as a national auto glass retailer. A person can sign a contract with an insurer giving high discounts or just create an Internet presence and then employ a network of willing independent installers to complete glass assignments. Quality control, enforceable warranties and product liability are just a few issues that can be met with little response. All of these items can affect honest local retailers. Ironically, timely reimbursements or even just being paid by the cyber shop may create even more drama if one becomes a sub-contractor.
Are we all without sin? How many owners take the attitude that it is a “me versus them” approach? “Let’s do it to them as they are always doing it to us” seems to be a common mentality, especially as the actions of TPAs are becoming more and more oppressive. Fraud becomes a chess game as one side counters the actions of the other. From this my approach, it is a losing, negative way to conduct business especially since one will eventually get caught or at a minimum, cause such a reaction among insurers or the general public that it affects the overall reputation or operations of innocent honest shops.
Consider the fact that our largest glass retailer and TPA operator has become a force that roots out fraud from its own industry. That in itself is a danger because it can easily lead to abuses of its own. This is one more reason that TPAs and glass companies should never have economic or corporate ties to each other.
Sadly fraud is never going to stop. Neither is death and taxes. However, I am getting very tired of paying for the unethical actions of a few miscreants. I am more than aware that our corporate adversaries are not angels either, but it is my personal preference to be able to sleep at night with a clear conscience or at least quietly walk by my local graveyard.
