Thursday, 23 February 2012 16:54

New York State Collision Tech’s Association Writes to West Virginia AG Re ARA Complaint

Mike Orso, President of the New York State Collision Tech’s Association (NYSCTA), has written a letter to W Va’s Attorney General Darrell McGraw expressing gratitude for his efforts in “protecting consumers relative to the sale and installation of, industry referred to; used, salvage, and junkyard-supplied parts.”

The letter is in response to the Automotive Recycler’s Association’s (ARA) complaint regarding McGraw’s use of the term “junkyard parts” to characterize general salvage parts. The comments and the lawsuit drew the attention of the Automotive Recyclers Association, which asked McGraw to stop using the term “junkyard parts” because the group feels it’s derogatory and misleading toward its members’ products.

The original reference was made by McGraw in a December 2011 press release announcing legal action against Liberty Mutual Insurance. In the memo the Attorney General’s office referred to recycled/salvage parts as “junkyard parts” and implied that recycled/salvaged parts are significantly inferior to new OE parts.

“We believe that this statement [implies] that salvaged, used and/or reconditioned parts are somehow unsafe and inferior to new OE parts,” says ARA CEO Michael E. Wilson. “This is simply false. Recycled/salvaged automobile parts are not “junkyard parts” nor are they classified as such under West Virginia statute. We have asked the Attorney General to clarify this statement,” said Wilson.

NYSACTA, however, believes the term is accurate and that terminology referring to parts taken from salvaged vehicles as “recycled” can be misleading and harmful to consumers.

“In our collective experience, the term ‘recycled’ has been misused and/or abused in collision repair estimates prepared by insurance company appraisers and some repair shops/garages for years… The process known as ‘recycling’ by definition is when a vehicle is shredded and metal by-products are re-smelted for another use. The ‘salvage part’ re-conditioning process takes place at the repair shop… The re-use of a ‘salvage part’ or the selling of a ‘salvaged previously used part’ does not qualify [the part] as recycled,” NYSACTA’s letter states.

NYSACTA also claimed that the ARA took an FTC position on recycled crash parts out of context. NYSACTA believes that, per the FTC, although installing salvage parts may not void a whole vehicle warranty, their use could possibly void other limited warranties.

NYSACTA’s letter also voiced concerns about salvage part safety, pointing out that cars in salvage yards have often undergone a great deal of abuse, and the quality and performance of salvage parts in a subsequent crash are “unknown.”

The association believes that terms like “recycled” are used by the insurance industry to save money while “lulling consumers into a false sense of what is ‘commercially’ viable and, more importantly, safe.”

“The ‘salvage yard’ association certainly has the right to defend their members; we are simply suggesting the term ‘recycled’ only be used when the part has been recycled as defined by law,” NYSACT says, later adding, “Our association firmly believes that the term ‘junkyard’ (where applicable) is not any more derogatory than the term ‘repairman-person’ vs. ‘repair technician’ or ‘repair shop’ vs. ‘garage.’ ”

The bottom line, NYSACTA said, is that “consumer safety and awareness is and always will be more important than nomenclature.”

NYSACTA v Aftermarket
The association has doubled down in defense of OEM parts by extending its criticism to the general aftermarket. NYSACTA announced February 2 it is alerting its members and the general public to the potential safety risks with the use of aftermarket crash parts, and is calling on all insurers in NY who specify the use of un-tested, unqualified, NON-OEM compliant crash parts to take corrective action immediately.

NYSACTA President, Mike Orso said, “I would think safety would be the most important element of any collision repair. Some insurers by their actions are putting their claimant or insured’s family in a vehicle that the [insurer] specified a repair with untested, at risk parts to save money. No one should be re-engineering a car after a wreck as it puts the consumer in damage as well as all highway users at risk. It creates un-due legal liability on the repair shop.”

Orso went on to say,  “the rules are: Repair or Replace the vehicle after a crash. Meaning; return the vehicle to pre-loss condition. One issue here is that; there is no recall system in place to warn consumers that their vehicle may be unsafe to drive or that their families safety is in unknown, unpredictable peril should a repaired car be involved in a another crash. Consumers should call their repair shop or check their collision invoice to identify what parts that may have been installed that are aftermarket. NY State Law requires shops to note the status of parts used in the repair, i.e. New, OEM, Used, Aftermarket, Reconditioned or Repaired.”

Ed Kizenberger, NYSACTA Executive Director said, “Already some insurers have announced they are discontinuing to specify aftermarket safety parts. Maybe they’re learning from the Toyota situation? We will be alerting our members, the media and state representatives in the Legislature to this matter. We have always been a proponent of following OEM guidelines and recommend our members strictly follow proven methods of collision repair. Remember; shops are the professional experts assuming the ultimate liability for the repair. “

Orso added, “The right thing to do is for insurers to issue an immediate recall to any consumer concerning any vehicle repaired with aftermarket safety parts. Insurers must be held accountable for all the costs of re-repair, and the consumer must demand refund for those who paid an additional premium for the use of OEM parts or those who paid any difference to repair a vehicle with OEM parts. The aftermarket industry needs to establish a formal recall system FOR these parts if and when they are used. The vehicle should have permanent label affixed alerting future owners and passengers that the vehicle has been modified and safety could be affected.”

Kizenberger also said, “For the future consumers can avoid this situation by only doing business only with those shops who are members of NYSACTA that have publicly adopted a Professional Code of Ethics or at the very least, is advocate for the consumer’s right to a proper repair using approved OEM parts and procedures.”

For more information please visit www.liabra.org.

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