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THE IGNORED “SUPP” PAYMENT
by Bruce A. Davis
We’ve all seen it too many times before.
The harried field adjuster scurries in and
out of your shop as you or your foreman
try to catch him to inspect and/or authorize
payment for supplemental damage discovered
in the course of extensive repairs,
or after a tear down on a vehicle that took
a major hit.
The field adjuster begs to be let loose to
get to the next shop on his route and
pleads with you to simply write the supplemental
estimate for him with the pact
that, “I promise to cover you on the supp
if you’ll just do this for me, this one time.
I’m swamped and trying to get off on vacation”
Armed with this claims handler’s already
inadequate original estimate, you
slog through it all and write a fair and
itemized supp, doing the adjuster’s job for
him. On your own you may have even
located used parts lowering the repaircost. With the job done, the packet for the
adjuster’s final review is packaged and set
off to him for payment. Weeks later
you’re still waiting for the bucks when the
same adjuster wants you to “cover” him
once more on another job ‘cause he can’t
get by because he’s either “too busy” or
still “on vacation”. You’re not a “proshop”
for this adjuster’s company, or
maybe you’ve recently been ejected off
their list. You’re now doing the adjuster’s
work for him, far too often.
The next time the same adjuster breezes
into your shop you lay out your paper
work for his review and he proceeds to
mow your grass on the supplemental estimates
you wrote for him, bitches about
you not having located enough used parts
and disagrees with your need for all that
trunk floor and quarter panel inner structure
straightening time. (Damage he never
saw because he was too lazy to get back
out to your shop before the job was completed).
Luckily you took digital photos of allthe related damage. Now the adjuster is balking at paying
you for legitimate work completed and busting your
chops line by line regarding your earnest/honest attempt
to do his work for him. And, oh yeah, he’s in your shop
on another job, inspects it, and drives off failing to leave
his initial estimate on the newest job. Four business days
later you still don’t have the initial estimate on the last
job he inspected, and you still haven’t seen payment for
the last two or three supplements you submitted to this
adjuster last month, upplements he okayed.
Sometimes, lazy adjusters such as this may also ask
you to “convert” the new parts values on their initial estimate
to cover supplemental damage when they now
you’ve also located good used parts instead of new to
complete the repairs. These guys cite being too busy to
come out and rewrite the supplement to reflect reality,
new versus used parts or more damage found. They cajole
you to violate repair statutes and repair disclosures
to your customer because they’re just too slothful to
come out and make their repair paper work correct at
your shop.
Watch Dawg is on the lookout for these adjusters. Turn
them in to us by phone or e-mail. We know their own
employers are intolerant of this kind of schlock claims
handling behavior.
Just last month our law firm turned in two such adjusters
and the previously ignored shops immediately gotpaid for their supplements. Through our intervention the
shops also received personal pologies from the leaders of
the two adjusters reported. In one case the log jammed
funds being withheld by one of these errant adjusters exceeded
$10,000.00! Furthermore, both hops are now being
treated with a whole new level of respect by the humbled
adjusters and the shops have the supervisors’ direct
phone numbers should the shops perceive even a hint of
retaliation from the guilty adjusters. We understand that
the subject adjusters have been put on probation with regards
to keeping their jobs. These once haughty adjusters
are now doing their own work, dropping off estimates,
writing their own “supps” and paying their “supps” on
time, maybe for the first time in years.Large auto insurance carriers do not condone their field
PD adjusters being so far behind with their paperwork and
so late on supplement payment obligations. The large auto
insurance companies know that such adjuster misbehavior
creates delay costs and only breeds unholy “deals” between
the shop and the adjuster where repair time and
supplement IOUs can end up bleeding from one job into
another and another over the course of time. Shun this
shaky business practice like the plague. Make all field
adjusters justify and finalize repair documents per job
regarding the parts, labor and hours they’ve authorized.
Our research into this issue also reveals that in many
cases the same adjuster who is always begging you to do
his work for him and/or cover his butt in one file or another,
is also generally bad mouthing you behind your
back to his insurance company employer when you complain
and pester him about his chronic nonpayment of the“supps” he authorized.
Let’s start a list of suspect PD field adjusters who have
been misusing Utah shops in this way. Contact Watch
Dawg with the names of regular offenders and we’ll report
it to the appropriate insurance carrier bosses. Have
the case claim numbers ready when you call in or e-mail.
If you get a “supp” okayed, you should be paid for it in
full. Adjusters who jack you around in this way need to
be reported and monitored. Adjuster misbehavior of this
kind represents tens of thousands of onpayment dollars
every month for Utah body shops stiffed in this way.
But, call, write or e-mail us with what you think.
The end.
Massive Consumer Rip-Offs in
Automobile Sales Industry
Report Documents How Consumers are Defrauded When
They Purchase Vehicles; Whistleblower Tells Firsthand
of Industry Methods
WASHINGTON, D.C. - Every day, consumers
across the country who buy automobiles are
bilked of hundreds and sometimes thousands of dollars
apiece by fraudulent auto sales representatives
perpetuating one of the most pervasive scams in this country, according to a new report by Public Citizen.
The report, Rip-Off Nation: Auto Dealers’
Swindling of America, outlines the way auto dealerships
rip off customers and is supported by documents
obtained by auto sales industry whistleblower
Duane Overholt, who worked in Florida auto sales
for 20 years. Industry-wide practices range from inflating
the cost of warranties and reporting one set of numbers to the customer and another set to the bank,
to stuffing the contract with extras that the customer
never agreed to pay for. The size of the purchase,
the flurry of paperwork and the complicated financial
deals make consumers particularly vulnerable to
the schemes developed by dealerships to squeeze the
highest possible profit from each sale.
The fraud is rampant. Customers in California,
Florida and at least 37 other states have been
robbed, according to a recent “Dateline” report. Further
evidence is provided in a host of lawsuits documenting
patterns similar to those explained in the
report in at least nine states. “The scams are not restricted to a few areas
or dealerships. Customers are being cheated on both
coasts and everywhere in between,” said Public Citizen
President Joan Claybrook at a press conference. “The tactics used are so sly that informed customers,
customers who have done their homework and exhausted
every measure to ensure they don’t get
ripped off, are taken just as easily as anyone else.”
“I was not a nice guy,” said Overholt, who
came clean in 1999. “Back-of-the envelope calculations
show that I ripped off consumers for about $33
million over my career - and that’s a conservative
estimate. While you’re working in the auto sales
business, you get the feeling that you are invincible.
You think you can do anything and get away with it.
And you often do.”
As outlined in the report, auto buyers are
cheated in many ways:
The dealer boosts the manufacturer’s suggested
retail price with extras, some of which may
come with the vehicle. Sales managers run credit
reports on potential buyers without their permission,
using the driver’s license the customer provides before
going for a test drive. With this information, the
dealer can learn how much credit the customer has
and even what the customer’s last car payments
were, for use in price negotiations.
Banks that have good relationships with the
dealers may insist on a higher interest rate in order to kick back to the dealer the dollar value of a few percentage
points of the loan, without the buyer’s
knowledge.
Customers are manipulated during the sales
process to pay more than the agreed-upon price.
This is often done with the use of worksheets listing
add-ons, although few of the items are associated
with a specific price.
If the sale is made after hours, customers are
asked to sign blank bank forms that the dealer offers
to fill in later, ostensibly after talking to a bank during
business hours. The numbers reported to the
bank may not reflect what the customer agreed to.
The dealer may add products to the sales contract
after the customer leaves. And because customers
don’t know they paid for a warranty or service contract,
for instance, they never make any claims using
it.
Victor Lewton, a Public Citizen employee,
recently purchased a Toyota Matrix. He thought he
was making a savvy purchase until Overholt reviewed
his documents and found a number of places
where Lewton may have been scammed, including
being charged $199 for an “appearance package”
that Lewton told the dealer he didn’t want.
Had I been made aware of my options regarding
these items, I could have saved between $400
and $600,” Lewton said. “Even with all that research,
I still spent more money than I should have
for options I didn’t want.”
In addition to calling for state attorney general
investigations by letter today, Public Citizen
called on state and local law enforcement authorities
to enforce consumer protection laws, and on state
and federal lawmakers to require that financial and
dealership documents be contained in a single file
available to the consumer on request. Public Citizen
also called for changes to the law to require disclosure
of the interest rates that the lender agrees to provide
and disclosure of any kickback to the dealer, to
require dealer employees to tell consumers that they
represent dealers and not the consumer, and to forbid
mandatory arbitration clauses in sales contracts. Meanwhile, consumers should:
1)Obtain financing independently of the dealer;
2)Refuse to
sign any arbitration clause;
3) Never sign blank financial
forms;
4) Remember that dealers make
money from extras and add-ons; and
5) If financing
is unavailable except from the dealership, never
drive a car off the lot before all financial transactions
have been agreed upon by the lending institution.
“Given the range of cases that have been filed
in a variety of states nationwide, it appears that what
we now know is only the tip of the iceberg,” Claybrook
said. “It is imperative that law enforcement
authorities take swift action to protect consumers and
seek civil redress and criminal convictions before the
evidence of wrongdoing is destroyed.”
Public Citizen is a national, nonprofit consumer
advocacy organization based in
Washington, D.C. The end.
Attention:
It continues to come up in discussions regardless
of how many times we reiterate it. This newsletter
is NOT produced by the Auto Body Owners Association
of Utah. The Utah Auto Body Watch Dawg
is published by the law firm of attorney Bryan A.
Larson. Mr. Larson is not a member of the Auto
Body Owners Association of Utah. However, Mr.
Larson and his staff, along with a group of enthusiastic
and capable body shop owners helped organize
this new and vibrant shop association. This association
elected its own officers and is now functioning
under its own power and steam. What is contained
in this newsletter is solely the opinions of Mr. Larson,
his staff and Watch Dawg readers. Larson and
his team continue to encourage the Auto Body Owners
Association of Utah, and lend support wherever
possible. We admonish all qualified shops to join
this powerful group. Watch Dawg does not speak for
the new association, and the association makes its
own decisions. Therefore, if there is anyone who has
been offended, riled, excited, or has been stirred to
action, by this newsletter, that’s good. That is part of
the purpose of Watch Dawg. If ever you disagree
with our views, please don’t use it as an excuse not
to join the newly formed shop association. In a short
time insurance companies have come to respect this
new association for their involvement in cleaning up
documented adjuster misbehavior and fraud. This
newsletter will continue to encourage the auto body
industry to stand up for itself and to stand for high
standards of integrity, performance, brotherhood and
sisterhood within the industry. More shops are joining
this new association and Watch Dawg will continue
to trumpet the many benefits of such shop unity
through a broader membership in this new organization.
If you want to help make conditions better join
this association, don’t battle it out alone.
News Flash
Starting in 2004 Watch Dawg will be published
every other month, or 6 times a year. We are
not in the newsletter business. We are in the business
of practicing law and representing people who
have been injured and are being taken advantage of
by unfair adjusters. Watch Dawg is important but it
is both time consuming and not cheap to publish.It’s the Law!
Utah Code Annotated
78-27-38 Comparative Negligence
(1) The fault of a person seeking recovery
shall not alone bar recovery by that person.
(2) A person seeking recovery may recover
from any defendant or group of defendants whose
fault, combined with the fault of persons immune
from suit, exceeds the fault of the person seeking recovery
prior to any reallocation of fault made under
Subsection 78-27-39(2).
(3) No defendant is liable to any person seeking
recovery for any amount in excess of the proportion
of fault attributed to that defendant under Section
78-27-39.
(4) (a) In determining the proportionate fault
attributable to each defendant, the fact finder may,
and when requested by a party shall, consider the
conduct of any person who contributed to the alleged
injury regardless of whether the person is immune
from suit or a defendant in the action and may allocate
fault to each person seeking recovery, to each
defendant, and to any other person whether joined as
a party to the action or not and whose identity is
known or unknown to the parties to the action, including
a person immune from suit who contributed
to the alleged injury. In the case of a motor vehicle
accident involving an unidentified injury. In the case
of a motor vehicle, the existence of the vehicle shall
be proven by clear and convincing evidence which
may consist solely of one person’s testimony.
(b) Any fault allocated to a person immune
from suit is considered only to accurately determine
the fault of the person seeking recovery and a defendant
and may not subject the person immune from
suit to any liability, based on the allocation of fault,
in this or any other action.
In short, if your customer is 50% or more responsible
for the accident involved, they will only be
able to have coverage to repair their car under the
collision coverage of their own insurance policy. In
addition, they will not have a claim for bodily injuries beyond the benefits of the personal injury protection
or no-fault coverage of their own insurance
policy. If they are 10, 20, or 30 percent responsible
for the accident, any claims that they may have
against the other driver will be reduced by an
amount equal to that same percentage of their own
comparative negligence. Who decides the amount of
comparative negligence? Ultimately, a jury could.
However, the insurance companies involved will often
times estimate or project what they believe a jury
might do and incorporate their own estimate of comparative
negligence in the resolution of claims short
of a jury making the decision. Obviously, insurance
companies have a financial incentive to estimate the
amount of comparative negligence high on the
claimant. Unfortunately, because of the stingy nature
of Utah juries, most attorneys are reluctant to
accept cases with significant amounts of comparative
negligence involved.
This next law has to do with receiving the agreed upon payment for your work. This law comes from Utah Code Annotated section
38-2-3. It is a repeat of a few months ago, but we have had a
couple of questions recently about some aspects of it, so we thought
we would run it again.
38-2-3 Repairman’s lien on personal property-
Lien subject to right’s of secured parties.
Every person who shall make, alter or repair, or bestow
labor upon, any article of personal property at the request
of the owner or other person entitled to possession thereof
shall have a lien upon such article for the reasonable value
of the labor performed and the materials furnished and
used in making such article or in altering or repairing the
same, and may retain possession thereof until the amount
so due is paid; provided such lien and right to possession
shall be subject and subordinate to the rights and interests
of any secured parties in such personal property unless
such secured party has requested such person to make,
alter or repair or bestow labor upon such property.
The end.
Bondo Bob
I remember my Driver’s Ed. class. It was Spring ‘65.
The muscle car era was raging outside as evidenced
by the cris-crossed burnout “J” strips permanently
welded into the pavement of my high school parking
lot. I recall my all too serious driver education
teacher and his vain attempts to curb the “hot rod”
spirit coursing through the veins of all the guys in
my class. Most of us already had our license, with
home built hot machines staged in the school’s parking
lot for a quick escape each day at 3:15 P.M. On
the first day of Driver’s Ed., back to back, our
teacher showed us two 16mm projector reel to reel
films, Blood on the Pavement and Mechanized
Death. These films looked like they were produced
by the same team that did all those Flash Gordon
movies of the late 40s. These were low budget fake
docu-dramas with no plot whatsoever, poorly drafted
and designed to scare youth into simply slowing
down. Filled with black and white footage of autowreck carnage and gore from the 30s and 40s these
reels depicted bloody collisions scenes swarmed by
cops all dressed like Barney Fife, complete with
shiny brimmed hats. The movies were picture versions
of auto crash songs we all knew well, like “Teen Angel”, “Deadman’s Curve” and “Last
Kiss”. Driver’s Ed. was the last class of each day.
We watched these movies with faked interest, seeking
to placate the teacher to get a good grade and
better insurance rates for our uneasy parents. However,
when the bell rang to end class, for us it was
more like, “gentlemen start your engines”, as we
dashed for the parking lot, girlfriends in tow. I have
vivid memories of my Driver’s Ed. teacher’s image
disappearing in my rear view mirror, shaking his fist
in the air, as a squadron of Ford, Chevy and Mopar
big blocks roared to life with burning rubber filling
their wheel wells as they squealed and fishtailed all
the way to the school grounds exit. I hear this former
teacher is still in therapy today. You see, we also all
had him for Health, where we drove him embarrassingly
nuts with questions we couldn’t get answered
in the PE locker room and he responded by repeatedly
showing us the campy 1950's substance abuse
classic, Reefer Madness. E-mail or mail some of
your best high school auto memories for reprint here.
The end.
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