Auto fraud can occur in many different forms, whether it involves vehicle cloning, owner give-up schemes, or inflated claims. But when partners of insurance companies get in on the act, it proves that the crime has no boundaries. Farmers Insurance recently busted several auto body shops in Texas for over-billing on vehicle repairs and parts, so Claims' Eric Gilkey spoke with him to find out more about how insurance companies are fighting the problem of fraud.
Can you explain how the auto shops were committing fraud?
Auto repair schemes typically include repairing parts while charging for new, replacing parts with used or aftermarket parts when charging for original manufacturers' parts, or charging for damage that was never repaired, either because it was never damaged or was left in a damaged condition. This is not a new trend. Farmers has been investigating and reporting or taking legal action in these cases for several years in a number of states. Not only is this scheme unfair to insurance consumers — it makes it difficult for honest repair facilities to compete.
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