As a follow-up to our interview of April 2012, Autobody News sat down with John Wallauch, Chief of the Bureau of Automotive Repair (BAR) recently, to find out about what he has learned and achieved during his first 15 months on the job.
Q: Legitimate collision repairers are very concerned about sketchy shops that are getting away with sub-par work and committing outright fraud. How can you respond to that?
JW: We have several body shops that are going through the courts all the time, but you rarely hear about the settlements once these cases are settled. It’s difficult to respond to this question, because most of these violators work under the radar, late at night and early in the morning. If we don’t know about them or see them in action, I don’t know how anyone can expect us to do something about them. We like to work with the organizations, such as the California Autobody Association (CAA) and the Automotive Service Councils of California (ASCCA). When they see something that they believe is not proper, they call us and let us know, and then we can investigate those cases.
Q: So, is it really as simple as a phone call?
JW: Absolutely the best way to do it is to contact the local office near you and tell us exactly what you’ve seen and what you believe. If you want to do it anonymously, we have no problem with that. We really don’t need to know who you are. It’s a tip and we appreciate every one, whether it’s about unregistered activity going on or something like that—sure, we’d love to hear about those. We do go out and see the potential violator in every situation, to follow up the tip and cite if necessary. We do what’s called “cite and fine.” First, we cite them and tell them they need to be registered. If they don’t want to do that, the next thing is the fine. We’ve been doing it this way for over a year now and it’s been very successful. When we get a tip, we always start looking at it that same week. If there’s a shop that’s operating late at night and early in the morning, we obviously have to make arrangements to get people scheduled. But, if the violations are occurring during business days, we’ll be out there right away.
Q: What types of fraud are you encountering in the collision industry?
JW: Body shops seem to get into trouble by doing incorrect things with parts they install on customers’ vehicles. Within the last 11 months, we’ve received 1,400 auto body-related complaints and there are a total of 5,400 shops registered within the state. Currently 36 of these complaints are going into formal filings, which might lead to the revocation of their licenses or possible fines associated with them. But, to get back to your question, what shops are getting into trouble typically in the collision field? A good example that came up the other day was involving a body shop that installed a subassembly that is used to hold a bumper on. You can only buy this part by name and with a specific part number. So, this body shop purchased the part and cut pieces off of it to attach to the vehicle they were repairing, so that the bumper would fit. Unfortunately, then the shop’s paperwork indicated the entire subassembly was used. They probably saved the customer’s money in the end, but they did not disclose the information on their invoice. If they had stated it as a “partial use,” the shop would have been covered and the consumer would have been informed. It’s normally those types of activities that we encounter. As far as installing inferior parts, we don’t usually get into that. You might find out that people said, “I bought a new quarter panel and then later it turned out to be a used panel.” Those types of things will also get you into trouble. Or if you say you replaced the panel and didn’t do it, then there’s an issue there. If you bondoed it together and just knocked it out and then sold it as a new part, that’s obviously not a good honest repair. That’s another transgression that can get body shops into trouble. Anyone who knows body work and inspects vehicles containing those types of issues is fairly easy to find. In the end, it’s all about just being careful in what you fill out on your invoice. You must disclose all the facts and document everything you’re doing on a car. Full disclosure to the consumer is important and if it’s done right, the paperwork will protect the body shop and the customer as well.
Q: So, the only way to really catch these violators is to have the consumers turn them in?
JW: That’s typically how it happens. Yes. In mechanical repair, you fix something like an alternator, wiring harness, suspension, and if it does not work, you get a complaint. In collision, you fix a dent and paint it, and shine it up, and if it fits well, the consumer is happy. There may well be some things under all that paint and glitter that weren’t done correctly, but if the consumer doesn’t know it, we’ll never find out about it. We tell all the shops that full disclosure is the only way to go. You list what you install, specifying whether it’s original equipment or aftermarket. Shops run into trouble where they buy an aftermarket or used quarterpanel and then list it as new. But, if the consumer doesn’t know, we can’t do anything about it. It all comes down to “the eye of the beholder” with quality. If the customer is happy, the car looks good and the doors open and close correctly, we won’t hear about it.
Q: Some body shop owners have suggested that the BAR should do impromptu surprise inspections of body shops. Do you think that would be an effective deterrent?
JW: To perform ongoing random inspections of body shops would be a horrendous chore. If we suspect that a body shop is doing incorrect things, we will actually build cars and send them to the shop in question. These are called “undercover operations,” and it takes a pretty severe situation to warrant an operation like that. We actually damage the cars a specific way to see how these shops will respond. And we’ve caught offenders using this technique, so it definitely works. This would be a shop that’s regularly charging for operations that they do not perform and to the point where they’re a menace to society and giving the industry a black eye. But those cases are few and far between, because the vast majority of the body shops out there are clean operators and follow the law.
Q: You came more from the smog/mechanical side of the industry, so what have you learned about the collision side of the business?
JW: If you had asked me a year ago what I-CAR stood for, I couldn’t have told you. So, my exposure to the collision industry has been vast over this past year. I’ve learned a lot about it, but I have a lot to learn. I have a great team around me, which makes it easier. We’ve got people here with lots of experience, so it’s not difficult to just let them do their jobs. You asked me before, “How do I manage the activities of 600 people?” I really don’t because it’s not possible. You have to have a good team to succeed, and we have some of the best here across the Bureau, and I’m very pleased with them. I told you last time that I would have an open door policy and that’s always going to be the way I do things. My employees, consumer groups, collision industry leaders, and body shop owners—anyone can take advantage of this policy and I look forward to meeting them.