The Coalition for Collision Repair Excellence (CCRE) recently voiced its opposition to the Collision Industry Conference (CIC) Fair Trade Practices committee’s proposed criteria for DRP reform, saying that DRPs “foster, support and promote insurer steering of repairable vehicles.”
“Though the vast majority of collision repairers understand this, it seems that this simple concept remains lost to the minds and/or aspirations of the leaders of the CIC’s so-called Fair Trade Practices committee,” a statement released by CCRE said. “It would therefore appear that the true goal of CIC’s latest proposed DRP criteria is to continue to promote the personal interests of certain among CIC’s participants and administration. The practice of writing and rewriting proposals in hopes that the insurance industry will comply has never accomplished anything positive for the collision industry, and it never will.
“Many DRP shops are among those complaining about insurer steering practices against them. And yet in spite of the fear and intimidation that keeps many of them tied to their DRPs, any knowledgeable DRP shop owner knows that it is his compliance as a DRP that guarantees that insurer steering remains profitable for insurers.
“Though insurers have attempted to ‘legitimize’ what was once considered an ‘illegal’ practice (by writing policies that demand that policyholders patronize insurer shops with DRP agreements), CCRE maintains that these now ‘legitimized’, formerly illegal practices are still un-American, defying the concepts of ‘free trade’ and stifling competition in our typically capitalistic society. How is it that we now have the North American Free Trade Agreement, which allows for free trade to flow from Canada through the United States and into Mexico, and yet we have no ‘free trade’ within our own ‘free’ country in reference to insurer interference in the collision repair business and several others?
“The time is now for our collision industry to stop feeding insurers’ steering machine through participating in DRPs. The time is also now for CIC-type groups to cease from facilitating insurer abuses through recognizing direct repair and the many things it promotes as being in any way legitimate. CIC’s even considering such a proposal as this so-called direct repair criteria (coming from an organization that proclaims to be promoting ‘fair trade practices’ for the collision repair industry) is even more detrimental to the collision repair industry than the DRP concept itself.”
The statement ended with an endorsement of the Code of Ethics (click HERE) produced by attorney and consumer advocate Erica Eversman, stating that it’s a “workable ‘Best Practices’ that the collision industry should adopt.”
Scott Biggs, a member of the Fair Trade Practices committee who moderated the DRP reform discussion at NACE, says it’s understandable how shop owners and organizations like CCRE might interpret the DRP reform measures as some sort of support for DRPs, but believes that a closer examination of these points could lead to a totally different conclusion.
"This proposed reform is very specifically designed to force both insurers and repairers to operate fairly and legally and in compliance with consumer protection laws," Biggs said. "The ’14 Points of DRP Reform’ were not generated by CIC. The points were presented at CIC as a basis for debate and discussion by a panel comprised of an equal number of insurers and repairers. Some of the repairers on the panel are as opposed to DRPs as CCRE is."
"Our objective was to create a healthy debate about these questionable business practices. Passive protests and burying one’s head in the sand doesn’t change how nearly 70 percent of all insurance-paid claims are processed," Biggs added. "Continuing to deny the fact that illegal, unethical and immoral business practices exist will not make them go away or make them any less abusive. Transparency, public scrutiny and honest open evaluation will."
Biggs also suggested that CCRE’s argument left out the observation that unethical business practices can be committed by both insurers and repairers, citing a study conducted by his non-profit consumer advocacy organization and body shop cooperative Assured Performance Network that indicated that both shops and insurers regularly employ unfair trade practices that unduly influence consumers and take advantage of their lack of knowledge.
“Both insurers and repairers are wrong in doing this, so both have an equal responsibility to conduct business fairly and according to the law,” Biggs said. “But if insurers complied with the laws and the points raised in the DRP reform manifesto, DRPs as we know them today would be gone and replaced with a real form of customer service they could provide legally, morally and ethically.”
For more information on CCRE, call (877) 700-7743 or visit www.theccre.com. For more information on CIC, visit www.ciclink.com. To learn more about the "14 Points of Reform," read the January 2009 cover story in BodyShop Business called "The New DRP."