LOS ANGELES–(BUSINESS WIRE)–June 28, 2006–Farmers Insurance Exchange and Mid Century Insurance Company have sued two separate body shops and their owners, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. The civil complaints, which are similar to prior successful lawsuits against body shops who submitted false insurance claims, seek not only damages for the fraud committed, but seek injunctive relief, where the courts are asked to order a halt to these deceptive practices. The lawsuits are pending in Santa Clara and Los Angeles.
The lawsuits detail a systematic scheme where the body shops billed Farmers for services that were never performed. This includes billing for parts and labor that were never provided. Once Farmers suspected fraud, it immediately inspected the cars involved, confirmed that there were no safety issues and exposed physical evidence of fraud.
“We expect and assume honesty and integrity from those people who render services for our policyholders. When we develop concrete evidence that intentionally false claims have been filed, we take swift action against the unscrupulous individuals,” said Doug Ashbridge, Director of Special Investigations. “Farmers is committed to fight fraud, no matter where it occurs and no matter what form it takes. Farmers continues to cooperate with law enforcement on these and other matters around the country, working to deter anyone from attempting to defraud Farmers and its policyholders. We are committed to stamp out fraud. We will assist law enforcement on criminal matters and file our own civil actions to deter anyone who is contemplating submitting fraudulent insurance claims. It is our commitment to our policyholders to take fraud out of their premium dollars.”
In the Santa Clara action, Farmers noticed an unusual billing pattern, initiated an investigation and developed evidence against defendants Tommys Body Shop and its owner, Gia Van Tran. Farmers’ Special Investigations Unit, which includes body shop experts, inspected all 12 vehicles, documenting fraud in each invoice. The expert inspections revealed substantial discrepancies between the invoices and the work actually performed. The invoices reflected billing for repairs that were not done, billing for replacements where the parts were not replaced, billing for part replacements that were only repaired and other similar billing issues. Farmers is seeking over $320,000 in statutory damages for the intentional actions of the defendants.
The Los Angeles action against Hollywood Auto Body Shop, Inc. and one of its officers, featured similar false claims. Farmers inspected eight vehicles, finding that 30% of each invoice involved billing for parts that were never placed on the vehicles and billing for services that were never rendered. Farmers is seeking over $190,000 in statutory damages for the intentional actions of the defendants.
Mr. Ashbridge went on to state: “Body shops cannot bill Farmers, accept money for the parts and services, fail to install the parts or render the services, and then simply pocket the money. It is wrong; it is fraud. Farmers has developed a statewide team that is designed to detect precisely this type of fraudulent activity. Our investigators’ efforts and expertise exposed the fraud being perpetrated here and developed the physical evidence of fraud. Lawsuits such as this are part of a nationwide commitment to stem the tide of insurance fraud.”
