Car crash racket runs rampant in Victoria.

Civil liability
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Car crash racket runs rampant in Victoria.

Postby allde » Mon May 23, 2016 6:39 am

A SOPHISTICATED car smash racket with underworld links is running rampant in Victoria, leaving thousands of motorists without cars and facing excessive repair bills.

The elaborate con involves dodgy lawyers, tow-truck drivers, panel beaters and hire-car operators working together to hold motorists to ransom and getting kickbacks.

Some of those involved in the rort have links to organised crime and outlaw bikies, who use smash repair shops as a ­facade.

Insurance companies say 1000 motorists a month are falling victim to the hostage-style trickery, prompting lawyers to push for funding to set up an a dedicated super clinic to tackle the cases.

Western Community Legal Centre has at least 20 cases on its books every year.

Called “carnapping”, the web of deceit starts with a ­not-at-fault driver signing a fake contract at the scene of a crash or at the panel beaters.

Drivers who sign the “Authority to Act” form unwittingly agree to a lawyer issuing legal proceedings against the other driver and gives an incentive for smash repairers to keep the cars locked up until costs are paid.

Cars are then fixed without the permission of the owner or insurance company and the vehicle is kept hostage until the inflated repair bill is paid.

Part of the repair “deal” is for the not-at-fault driver to be given a hire car while the vehicle is fixed.

But in some cases, the repair works are prolonged so the hire car company reaps more money from the driver and the repairer secures a bigger slice of commission.

Repairers start demanding money from the not-at-fault driver once the insurance company refuses to pay the inflated costs or disputes the repair work.

In one case, a smash repairer held a Melbourne man’s car for seven weeks and during that time petrol was siphoned out and the battery was replaced with a cheap second-hand one.

Western Community Legal Centre chief executive Denis Nelthorpe called for tighter regulation around the smash repair industry and legal profession to protect drivers.

“The problem is growing rapidly and there has been significant escalation in the scam,” he said.

The country’s biggest insurance company IAG, which also includes RACV, said the “opportunistic money-making” scam was increasing. ... picks=true

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Re: Car crash racket runs rampant in Victoria.

Postby Gravy » Mon May 23, 2016 2:52 pm

allde wrote:the web of deceit starts with a ­not-at-fault driver signing a fake contract at the scene of a crash or at the panel beaters.

What kind of moron signs any sort of third party contract before speaking to their insurer, let alone at the scene of a crash?

I do feel empathy for the victims of scams, but sometimes their utter stupidity makes it difficult!

Don't judge, Gravy... :?

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Re: Car crash racket runs rampant in Victoria.

Postby Hardy » Mon May 23, 2016 10:26 pm

This has been going on for decades. Most panel beaters can offer you this service. It is not a fake contract. It is a real contract. Anyone who has comprehensive car insurance should claim on their insurance and never enter into an agreement with their repairer for a " cost free repair" on the basis that all costs will be recovered from the at fault party, and the form authorises the repairer to commence a court case in your name to sue the person who you blame for the accident.

What happens is the car repairers don't like you making a claim on your insurance, because the insurance assessor will turn up and crunch their repair quote. So they prefer to repair your car and then sue the at fault driver (i.e. the at fault driver's insurance company) for the full over-inflated price of the repair. Usually they do this after the repair in finishes, so the insurer's assessor is too late to inspect the damage and work out what a reasonable cost of repair is.

What happens next is the repairer's favourite law firm them starts a court case against the at-fault driver. Then the owner and/or driver of the repaired vehicle is dragged into court to give evidence about his car accident. If he loses his case, then he has to pay the other side's costs and possibly the cost of repairs to the other vehicle too. At court, the lawyer who was engaged by the repairer is being told what to do and how much to accept to settle the case by the repairer while the plaintiff has almost no clue what is going on and is effectively paying the bills for all of this. If you find yourself in this situation you may want to settle the court case by accepting 50% of your claim, but then find the repairer trying to block that settlement because he wants 90% of the claim.

All the while the repairer has hold of the car and refuses to release it until all of his costs are paid. If you fail to recover all of these costs in the court proceedings or can't pay them yourself, then you may not see your car again for a long time.

Whenever I was engaged by the repairers lawyer's to represent people caught up in this mess I encouraged the client to settle the case and make a claim on their insurance policy. The repairers went ape and complained to their solicitors not to engage such a sensible barrister ever again. So fortunately I have not had to deal with this sort of problem for a long time now.

All of this can be avoided by taking out car insurance and avoiding entering into any "costs recovery" agreements with your panel beater.

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Re: Car crash racket runs rampant in Victoria.

Postby Gravy » Tue May 24, 2016 12:13 pm

allde wrote:Called “carnapping”... and the vehicle is kept hostage until the inflated repair bill is paid.
This article must have appeared in the Herald Sun. Withholding goods until payment is made is not called "carnapping", it's called a mechanic's lien and (this part at least) is entirely legitimate.

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