Thursday, 23 December 2010 20:14

Airbag Fraud Becoming More Prevalent, Experts Say

I got a phone call a couple of months ago from a caller who I didn’t know. He sounded concerned and very cautious.

“I got your home number from your office. I want to talk to someone at Autobody News, but I don’t want to tell you my name.”

I’m not much on whistleblowing but I’ve been asked this kind of thing before, just not so carefully and cautiously.

“Okay, it will be off the record” I said. He got to the point quickly, which was good, because I was at deadline on an assignment.

“I’m an airbag technician. I’ve learned how to service, install and troubleshoot any type of airbag that exists and I’ve been doing it for more than 10 years. At some point, I started to notice that people were doing sketchy things with the airbags. First it was a rarity but over time I’ve seen more and more of it. It’s like a virus—word gets around. Now I see a lot of people who are trying to avoid installing the airbags properly, because they don’t want to pay the price of doing it the right way.”

Still without naming names or telling me where he worked, my anonymous contact continued.

“Most of the airbag companies out there are honest, but the dishonest ones are getting away with doing dishonest things,” he said. “They disconnect the airbag system and then install a resistor so that the deployment light won’t come on. Then, when used car resellers, brokers or individuals buy these vehicles in which the airbags are not operating and yet appear to be fine. That’s when it becomes dangerous and life-threatening. Someone could easily get seriously hurt, or killed.”

My anonymous caller said that this type of fraudulent activity has become more rampant in this down economy. He’s experiencing it mostly within the used car industry, where shady dealers are willing to jerry rig these airbags, instead of replacing them. And he even sees a handful of body shops cutting corners when it comes to airbags as well, he said.

“I had to tell somebody, because one of these days I’m going to read about a death caused by an illegally installed airbag and my conscience will bother me for a long time when that happens. And at this rate, it’s definitely going to happen.”

He hung up, sounding somewhat relieved, and I decided to look into the situation.

I called around. Although several organizations wouldn’t return phone calls (The California DMV and the National Highway Traffic Institute, for example), I found some people in the know who were more than willing to share their perspectives.

According to my contact at the Coalition Against Insurance Fraud (CAIF) this is the way it works: An unscrupulous technician will remove an airbag after it has deployed in an accident and make it appear as though it’s been replaced. Or, a shady shop or individual will replace the airbag with a dummy or a sub-par cheaper airbag that isn’t designed for the vehicle in question. This part is disclosed in a press release distributed by the CAIF.

In my search for someone to go on the record, I contacted Doug Hansen, the president of AirbagService.com, a company he founded in 1992 with 18 locations nationwide. “I’ve experienced a lot of fraudulent and questionable activity in this industry for the last 30 years,” Hansen said. That checked out with me because airbags have been in use since the ‘70s.

“It’s caused by people who aren’t paying attention to the right things and/or motivated by money. We’ve seen more fake bags, fake covers, and garbage work than anyone else out there.

“Most of the top collision shops are doing a responsible job following the OEM standards,” Hansen continued. “But some people are also gravitating more toward doing improper cosmetic work on airbags to save money or rushing through repairs to save time. I see a trend where inferior airbag repairs are more and more evident within the last two years, and I do believe that the recession must have something to do with it. Re-painting them, for example, is not acceptable for several reasons, because it also affects the braking mechanics of the vinyl. The vinyl is very specifically tuned to the airbag, so it can cause the airbag to deploy improperly. More people are doing unscrupulous things, trying to get their codes cleared for $49 instead of replacing a mandatory controller or, replacing a controller on an airbag system that isn’t required by the manufacturer because they don’t have the proper scan tools or just not replacing all the parts needed for a proper repair—these types of things are happening. In addition, the pressures on the body shops for cycle-time, cost saving and no supplements can force poor decisions even when someone is trying to do the right thing.”

Hansen said he’s seen a wide range of questionable things done to airbags within the salvage industry, but his stance about salvaged airbags over the years has changed.

“Our first position is to use new OEM parts per the manufacturer’s recommendations, and we’ve always been advocates against the use of salvaged airbags. Most of our work comes from responsible body shops and insurance companies who require new airbag system components. But we also service the used car industry, rebuilders and retail customers where we’re seeing more salvaged airbags across the board.

“I’ve softened on the salvaged airbag question more recently, however, because we now know that salvaged airbag are going to be used by some customers and it’s not illegal,” Hansen said. “Although it’s not recommended by the OEM’s, what we’re saying is this—a professional airbag technician who at least knows how to use a torque wrench and can program the proper computer codes can probably work within that realm on certain cars. We’ve taken the position that if a professional is installing a set of used airbags at the customer’s request; it’s the right match (make, model, year and color of the car) and they are following the rest of the manufacturers recommendations and aren’t doing anything sketchy with the system, it’s okay. The customer also needs to understand the risks and accepts the liability of the salvaged parts they’re having installed.”

The Automotive Recycling Association (ARA) is trying to teach its members about how to properly handle airbags while setting standards that can assure safety and responsibility, and Hansen thinks it’s a smart move for the entire industry, he said.

“The ARA has a program called ARA Pro, where they’ve developed their own standards for handling airbags, which is a positive step in the right direction,” Hansen said. “At least there is a group out there that is trying to do this responsibly. What we’re saying and what the industry is realizing is hey—if a car is totaled and the person can’t afford brand new airbags, recycled airbags that are properly matched with the particular vehicle, can be an acceptable option. They have to sign a release and use new electronics, parts and controllers, but if they can do it properly, using recycled airbags can provide a reasonable solution.”

Hansen isn’t enamored with the idea of using recycled airbags, but he also realizes that it can be a viable alternative if done the right way.

“This is the reality in this industry right now and it’s going to happen regardless. So, then you have to ask yourself—what is the responsible way of doing things? We can’t bury our heads in the sand because a sector of this business is going in this direction. Let’s make sure that if they’re making this decision and installing recycled airbags, at least it can happen professionally and properly within guidelines.”

Matt Patterson has owned and operated AirBagService.com’s San Francisco Bay Area businesses in Northern California since 1995 and has more than 20 years experience in the industry, he said. What are the most basic indicators that an airbag has been tampered with, we asked Patterson.

“Peeling paint and vinyl repairs on the airbag cover; if the logo or lettering on the outside of the airbag in unclear or illegible; if the outside color of the airbag doesn’t match the rest of the car’s interior colors; if the airbag warning light doesn’t come on at all, remains on or if it doesn’t illuminate when the vehicle’s ignition is turned on, those are the standard things you’ll discover when an airbag has been tampered with. People need to look for these tell-tale signs and call us if they have any concerns about their system so it can be inspected.”

How can this industry-wide problem get solved before a slew of injuries—possible fatal ones—take place?

“It’s widespread and it seems to be growing,” Hansen said. “Whenever we catch one of these jerry-rigged airbags, we’re always thinking about all of the other ones that are still out there on the road right now. We can’t stop everything that’s happening, but if responsible people can teach others the right way of doing things while monitoring and certifying their own work, things will improve. We can’t afford to let the standards of our industry slip and we need to educate our customers about the importance of proper airbag repairs and the risks of inferior work. When our customers understand which shops take their safety seriously, it can only help the collision industry as a whole.”

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