Every issue of CRASH Network brings you a quick-to-read summary and analysis of the week's key news, including information and ideas for your business you won't find anywhere else. Below are a few stories selected from past issues.
• CLASS ACTION DISMISSAL APPEALED: Lawyers representing Pennsylvania-based Crawford’s Auto Center, and North Carolina-based K&M Collision, are appealing a U.S. District Court judge’s dismissal of their class action racketeering lawsuit against seven large auto insurers. The judge dismissing the case found that the lawsuit failed to support the shops’ claims that the insurers engaged in fraud or extortion to reduce what they pay for repairs. Though transferred to the same court as nearly two dozen other lawsuits against insurers by shops around the country, this case differed from the others in that it sought to be a class action – on behalf of thousands of shops that have done work paid by the insurers since 2006 – and because it alleged racketeering, rather than antitrust. “The reader who slogs through all 172 pages of the [amended version] will be left almost entirely in the dark as to what role any of the [individual insurers] played or what actions any of them took in furtherance of the [alleged racketeering] enterprise,” U.S. District Court Judge Gregory Presnell wrote in dismissing the lawsuit.
From the June 5, 2017 issue:
• SHOP WON'T SETTLE FOR PARTIAL LABOR RATE REIMBURSEMENT: A CRASH Network subscriber said he’s fed up with the heavily discounted rate at which a large non-OEM parts distributor says it will pay his shop for labor related to non-OEM parts that prove to be unusable. “What they are paying doesn’t even cover the cost of what I’m paying the technician doing the work, when you factor in payroll tax,” the shop owner said. “Plus the time spent on that unusable part is time that technician isn’t producing on another job.” The shop owner said he’s begun charging the insurer on the claim the more than $20-per-labor-hour difference between what the parts distributor will pay and his shop’s labor rate on most jobs. “We have at least four major insurers paying us that difference with no push-back,” he said. “One insurer contacted [the parts distributor] which prompted [the vendor] to pay the same labor rate we were getting for that claim.” He suggested that a future “Who Pays for What?” survey ask about shops’ billing practices – and insurers’ payment practices – related to the added labor caused by ill-fitting or otherwise unusable non-OEM parts.
From the May 29, 2017 issue:
• ENTERING BOGUS PARTS TYPE IN PARTSTRADER: A number of “Select Service” shop owners have told CRASH Network that State Farm representatives have suggested they list non-OEM parts on initial estimates – even for part types/categories for which State Farm does not call for the use of non-OEM parts – before they are uploaded to PartsTrader in order to try to solicit price-matching from OEM dealers. The shops later have to convert the parts on the estimate to OEM. The suggestion came as a way for the shops to improve their “competitiveness” on the “Select Service” program, according to the shops. A State Farm spokesperson neither confirmed nor denied this was a practice the company endorses, saying only, “Select Service repairers should continue to work with their State Farm contact if they have questions about writing an estimate or the use of PartsTrader.” One of the shop owners characterized it as “yet another step back” in terms of productivity and double-entry of data. “All along, State Farm has said PartsTrader is supposed to make the whole process more efficient, but here they are suggesting yet more administrative steps,” the shop owner said.
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