In addition, the program discussed the lawsuits filed by more than 500 body shops in 36 states against the top insurance companies in the country to address their concerns.
“This was just another validation of, as CNN put it the ‘scheme’ that’s going on within the insurance industry and anyone associated with them. It also validates what shops all around the country have been seeing and dealing with for years,” said Ron Perretta, owner of Professionals Auto Body in Pennsylvania.
“This segment [CNN] strengthens our position with the nationwide suits,” said Perretta. “These types of tactics are tragic and offensive, deliberate and most of all hurting family’s of consumers financially through diminishing the values of the second largest investment people are making all across the country and their safety.”
During the show, Drew Griffin, CNN special investigation unit correspondent, looked into the allegations. He interviewed Bill Burn, a national auto repair expert, as well as Matt Parker, owner of Parker Auto Body in Monroe, LA. Both addressed the issue of “bad repairs” conducted by some body shops allegedly due to pressure from the insurance companies to use sub-par parts.
John Eaves Jr., of Eaves Law firm in Jackson, Mississippi, also spoke during the segment. “Every state in the union is experiencing the same sort of struggle here between the body shops trying to do the work the right way, and the insurance companies trying to cut corners and force them to use unsafe parts and unsafe methods on their cars,” said Eaves, the lead attorney for the antitrust Multi District Lawsuit filed in Florida.
Buddy Caldwell, Louisiana’s Attorney General, and Jim Hood, Attorney General of Mississippi were also featured. Both discussed their concern about safety issues using these kinds of parts. Caldwell has already filed a lawsuit against State Farm, and Hood is in the process of filing one as well.
Hood explained the problem of insurance companies steering business away from body shops that don’t follow their rules. “They’re going to say, we’ll blackball you. We won’t put you on our select service list, and we’re going to make you send us estimates [supplements] to us five different times just to aggravate you. That’s what they do,” said Hood. “They use their economic power to grind down working people.”
CNN included the following statement from State Farm: “Our customers choose where their vehicles are going to be repaired. We provide information about our Select Service Program while at the same time making it clear they can select which shop will do the work.”
Dick Luedke, spokesperson for State Farm Insurance, said that only a small portion of the information they provided to CNN was used in their report. “We are disappointed that CNN did not choose to report what Autobody News has already reported, that all of the counts in the multi-district litigation in Florida that are specific to the state of Florida have been dismissed twice, although the court has permitted the Florida plaintiffs a third chance to re-plead,” said Luedke. “Moreover, a Magistrate judge has recently recommended to the District judge that the Mississippi complaint also be dismissed. We did make CNN aware of those rulings.”
Neil Allredge from the National Association of Mutual Insurance Companies was also interviewed by Griffin. “In many cases, these parts are no different,” said Allredge. “They’re made in the same factories. One just comes out with an auto manufacturer’s name on it and others don’t.”
When Griffin told Allredge “That’s not true,” Allredge disagreed. After Griffin showed him a replacement hood for a Honda that was made in Taiwan and coming apart, Allredge went on to say that he didn’t know the circumstances of the parts Griffin mentioned and didn’t provide a further comment.
During the show U.S. Senator Richard Blumenthal, D-Connecticut, said, “Salvaged parts, inferior or even counterfeit parts certainly raise safety concerns. And often, those kind of parts involved in this practice of steering,” said Blumenthal. “And that’s why I have been concerned for years about it and why I think the Department of Justice should be investigating.
One of the cars featured on-air was videotaped at Clinton Body Shop in Clinton, Mississippi. John Mosley, owner of the shop and the President of the Mississippi Collision Repair Association, said CNN contacted him when they were in the area interviewing the attorney generals.
He said the executive producer of the show, Scott Bronstein, asked if Mosley had a car that had been taken to a direct repair shop and suffered from a poor repair due to the parts used or actual labor operations performed. He replied that he had a vehicle brought in recently from Eugenia Randle.
Randle brought her car into Mosley’s shop after it had been repaired twice at a “preferred” insurance company shop and was still not working properly. In the CNN report, Randle said, “Well, cosmetically to me, it looked fine. But once I got in and got down the street, it just started driving really crazy. And I immediately took it back,” she said.
When she brought it to Clinton Body Shop, Mosley said one of his employees took it out for a drive and found it to be unsafe. “So we put it up on the rack, we found the bent wheels, the frame damaged and other issues with it,” said Mosley, who also owns a shop in Richland.
After CNN’s Griffin took it out for a test drive himself, he said, “Not only the tail section ripped and unrepaired, three of four tire rims [wheels] were damaged. And as I drove, the steering wheel was shaking so violently, I had to grip down from veering to the right. The front left tire was just wobbling,” said Griffin. Griffin was referring to a damaged left rear frame rail.
“I carefully drove this shaking car right back to the insurance company’s preferred auto body shop, where the general manager promptly told us to leave.”
In response to the CNN report, Jack Gillis, Executive Director of Certified Automotive Parts Association (CAPA), said, “The bad news: we all know that substandard parts exist in the market. The good news: CAPA’s independent, fully transparent non-profit rigorous quality certification program enables shops, insurers and part distributors to identify high-quality, safe and good fitting alternative parts. Because neither shops nor insurers can identify quality alternative parts by looking at them or depending on seller’s claims, CAPA provides the market with the ability to make an informed and quality-based choice. Shops and consumers want repairable vehicles without compromising quality. CAPA provides that option.”
He added, “As to the broad brush disparagement of collision repair shops, clearly there are thousands of other American collision shops that do quality work and use CAPA quality parts—it’s just too bad that they weren’t part of the story.”
In a recent letter to its members, the Society of Collision Repair Specialists stated, “The CNN special program highlighted the practices of identifying the cheapest parts in their claims settlement practices, and it is similarly common that their indemnification practices reflect prices that are substantiated by the lowest common denominators in the market as well; not necessarily what consumers would support in a well-functioning marketplace.
“It is important to recognize that there are both ‘good’ and ‘bad’ market representatives in every trade and profession. It would also be inaccurate to make the assertion that simply because a collision repair business works with an insurance company, that they must be performing sub-par work.”
“What the newscast helped to highlight, was that the system is broken, allowing those with the financial responsibility to indemnify for loss to interject themselves into influencing price and thereby the process and/or quality of services provided.”