I have a shop in California. It was brought to my attention that a couple was going around scamming auto body shops. They would purchase a wrecked vehicle and put the car in the wife’s name. The husband would then bring the car to the shop and authorize thousands of dollars in repairs (not being the registered owner). When the vehicle was done, the wife would come to pick it up, claiming she never authorized repairs as the registered owner and ultimately being given the car without charge. Have you heard of this, and what are the rules for authorization of repairs when it comes to the registered owner?
No, while I have heard of several scams against collision repairers, this is a new one – and one that could only be perpetrated where state laws make it possible.
While I am not an attorney and as such do not provide legal counsel, I can say that the laws governing such issues may vary in each state. I encourage business people to be familiar with the laws (federal, state and local) that govern their businesses in their specific state(s) and counties/jurisdiction(s).
As an example, here is Florida’s law:
REGULATION OF TRADE, COMMERCE, INVESTMENTS, AND SOLICITATIONS
Chapter 559
REGULATION OF TRADE, COMMERCE, AND INVESTMENTS, GENERALLY
PART IX
REPAIR OF MOTOR VEHICLES
559.903 Definitions – As used in this act:
(1) “Customer” means the person who signs the written repair estimate or any other person whom the person who signs the written repair estimate designates on the written repair estimate as a person who may authorize repair work.
After reading this, one can see where, in Florida, “ownership” or “registered owner” may have little if any bearing on the authorization to repair or who owes for the services. Such disputes arising out of ownership/non-ownership issues would likely be handled through the courts as a civil and/or possible criminal matter.
One can see where, in this scenario, the scammer may prevail, but other issues may be at play here such as garagekeeper’s liens and such. Repairers must be familiar with the lien laws as they apply to their businesses.
In addition, it may be found that, because in a marriage (as in Florida where ‘one equals one’) wherein one authorizes repairs, the other spouse may be legally obligated to honor the contract/agreement of the other.
I strongly encourage our ADE coaching/consulting clients to know the laws governing them and their businesses to prevent and avoid such issues. I suggest you check with a licensed attorney familiar with such issues in your state to determine if it is a viable concern and, if so, what you can do to protect yourself (i.e. get a copy of the vehicle’s registration, signature of the registered owner, etc.). You may be able to get an opinion from your state attorney general’s office, but if you do, be sure to get it in writing!
Furthermore, you may want to contact your state’s industry association to see if they have heard of such incidents from others and to ask that they look into the matter and get a legal opinion to share. In addition, they can serve as a hub to collect information from others who may have had such experiences and to possibly expose the perpetrators for possible criminal prosecution and stop the practice.
The main thing is to know the laws that govern your business within your state and your particular county/jurisdiction.
