Have you ever wondered just how legitimate some businesses are that you may be referred to? How about the auto repair shops you bring your vehicle to? Well, you are not alone. Aviva Canada, one of the world’s leading insurance brokerages, has similar questions. In 2017, Aviva Insurance Canada installed hidden cameras inside ten different vehicles to find out which auto repair shops within the GTA were overcharging their customers. This investigation was nicknamed Project Bumper in the hopes of catching auto repair fraud in action. Well, it was successful. Let’s take a look at the case study below.
Are auto repair shops ripping us off?
When the study was complete, Aviva found fraudulent activity taking place in nine out of 10 cases. This includes billing for repairs that were not requested or required. On top of this, some shops were going the length of deliberately creating additional problems for the vehicle in order to bill extra.
One of the randomly selected auto repair shops was Mississauga’s McClaren Auto Repair. The insurer arranged for two motor vehicles to be damaged in a similar fashion that typically appears in a collision. These vehicles, a 2010 Ford Fusion and a 2016 Chrystler 200, were then equipped with hidden cameras and driven by private investigators retained by Aviva to locations where collisions were staged. Afterward, the vehicles were towed to McClaren for repairs.
Shocking business practices in auto repair shop unveiled
When reviewing the footage from both vehicles, Aviva uncovered shocking business practices. This includes McClaren worker Fady Warda damaging the vehicles in order to increase the quoted price of repairs. Enter auto repair fraud claims.
“The camera in the Ford Fusion recorded Fady Warda repeatedly striking the area of the right front fender with an object,” The Financial Services Regulatory Authority of Ontario (FSRAO) states in the recent settlement. “The camera also recorded Fady Warda twice striking the right side of the vehicle’s raised hood with a large object.”
McClaren appraised the damage at over $4,880, yet a third-party appraiser found the actual damages done to the vehicle from the staged collision was nearly half the cost, roughly $2,400.
A settlement is reached six years later…
As of October 19th, FSRA fined the auto body shop $75,000 in connection to the fraudulent business practices. Additionally, employee Fady Warda was fined $15,000 in connection to the case. The FSRA imposed a compliance order and penalties of this cost against 1843538 Ontario Inc. carrying on business as McClaren collision. This compliance order also prohibits both McClaren and Warda from engaging in any business practices involving insurance.
“Both parties are not allowed to perform work that is reasonably expected to be paid by an insurer or hold themselves out as being able to perform such work,” the FSRA stated. “These restrictions apply to McClaren permanently and to Warda for three months.”
Michael Wetzel, an Aviva staff appraiser, appraised both vehicles in the case, yet did not request a hearing. In November 2020, he issued a $50,000 administrative penalty and an order to cease and desist. The cease and desist ordered both parties from engaging in the business of insurance for six months. Wetzel was not aware of Aviva’s Project Bumper at the time of appraising.
Keep yourself safe, take precautions with auto repair
Though it is good that another company committing auto repair fraud is no longer in business, this story serves as an important reminder. Always double-check and confirm any auto repair shops you are doing business with are legitimate. If you are in an accident, use one of the repair shops suggested to you by your provider. If this isn’t possible, do your research, read reviews, and follow reputable recommendations from others. Unfortunately, cases of auto repair fraud are far from uncommon in the province of Ontario.
Furthermore, making sure you have top-notch auto insurance coverage is a must. This will help you save yourself money in the long run. Are you in the market for a new insurance provider? If so, why not contact isure? Contact us or request a quote today!