AASP/NJ condemns fraudulent shop, but understands desperate measures

Oct. 5, 2015
AASP/NJ’s Executive Director released a statement condemning a shop accused of fraud, but also recognizing the current state of the New Jersey automotive market and the desperate measures it can foster.
On September 16, a Palisades Park auto shop owner was accused of insurance fraud. Dong H. Seok was brought up on charges for insurance fraud and hindering for allegedly claiming to be using a waterborne paint system – which was proven by the prosecutor in the case to be false – to receive higher reimbursement from Allstate.

Soon after this story broke, the Alliance of Automotive Service Providers of New Jersey (AASP/NJ)’s Executive Director, Charles Bryant, released a statement in response to the situation. In the executive director’s statement (available online at www.aaspnj.org), he condemns the shop’s alleged actions, yet recognizes that the current state of the New Jersey automotive service field can lead to desperate measures like the ones described in the case.

“First, let me be perfectly clear. I have no compassion for anyone that would supply an insurance company with a fictitious invoice in order to be compensated for a part, material, paint or anything else that he does not deserve to be paid for, nor do I condone this type of illegal activity,” he say. “However, on a daily basis I see insurance companies shortchanging their own insureds and the collision shops repairing damaged vehicles on the cost of paint and material. Many insurers in the State of New Jersey are currently using an antiquated, outdated formula to determine or limit the amount that they will pay for the cost of painting materials required to repair damaged vehicles when there are multiple accurate and computerized cost accounting programs readily available to the insurance companies or anyone else to determine the exact costs.

“The law or the rules should not be one-sided,” he adds. “If the prosecutor is going to charge a shop with fraud or a crime for supplying false documentation in order to get paid for more than it is entitled, then the prosecutor should be willing to charge insurers that are using false information to support their denial of the actual cost of the paint and materials they owe for on an insurance claim.”

AASP/NJ President Jeff McDowell also weighed in on the situation. “It’s these types of headlines that give all repair shops a bad reputation,” he says. “We don’t know if the shop did the things he’s accused of or not, but regardless, the perception that we constantly fight is reinforced with these kinds of news stories. It puts the vast majority of good shops in a negative light and we all suffer for that.”

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