Car crash racket runs rampant in Victoria, with thousands left without car, huge bills

EXCLUSIVE: A CAR smash racket is running rampant, leaving thousands of Victorians with huge repair bills and without their cars. This is how they do it.

Denis Nelthorpe has called for tighter regulation around the smash repair industry.

A SOPHISTICATED car smash racket with underworld links is running rampant in Victoria, leaving thousands of motorists without cars and facing excessive repair bills.

The elaborate con involves dodgy lawyers, tow-truck drivers, panel beaters and hire-car operators working together to hold motorists to ransom and getting kickbacks.

READ: BEWARE OF THE CARNAP CON

Some of those involved in the rort have links to organised crime and outlaw bikies, who use smash repair shops as a ­facade.

Insurance companies say 1000 motorists a month are falling victim to the hostage-style trickery, prompting lawyers to push for funding to set up an a dedicated super clinic to tackle the cases.

Western Community Legal Centre has at least 20 cases on its books every year.

Called “carnapping”, the web of deceit starts with a ­not-at-fault driver signing a fake contract at the scene of a crash or at the panel beaters.

HOW THE SCAM USUALLY WORKS

THE LAWYER

• Writes up a quasi authority to act form allowing a lawyer or recovery agent to take control of the case
• Can initiate legal proceedings to recoup costs on person’s behalf even without permission
• It is usually done so to get more money from the other party

TOW TRUCK DRIVER

• At the accident scene, the tow truck driver makes the not-at-fault driver sign the contract
• The car is towed to a smash repairer
• No choice of where car is taken to
• A kickback given for taking car there

SMASH REPAIRER

• If the authority to act was not signed at the scene, the driver will be made to sign it at the panel beater
• Inflated repair costs are made to the car
• Car kept hostage until funds are paid

HIRE CAR

• A hire car is dropped off at the not-at-fault driver’s home and told it can be used at no extra cost
• Gets a bigger kickback the longer the smash repairer holds the car
• Driver then slugged with fee to pay for car

HOW TO AVOID BEING SCAMMED

• Always call your insurer after an accident, even if it wasn’t your fault
• Take photos or video of the damage before the car goes onto the truck
• Read the towing information pamphlet to inform you of your rights
• Always question a “free” hire car offer
• The only thing you should need to sign on the roadside is the ‘Authority to tow’ document. Do not sign anything else
• Make sure you get a photo or copy
• Know where your vehicle will be towed
• Don’t sign any contracts or authorise repairs until you speak to the insurer

A scam victim’s car. Picture: Supplied

Drivers who sign the “Authority to Act” form unwittingly agree to a lawyer issuing legal proceedings against the other driver and gives an incentive for smash repairers to keep the cars locked up until costs are paid.

Cars are then fixed without the permission of the owner or insurance company and the vehicle is kept hostage until the inflated repair bill is paid.

Part of the repair “deal” is for the not-at-fault driver to be given a hire car while the ­vehicle is fixed.

But in some cases, the repair works are prolonged so the hire car company reaps more money from the driver and the repairer secures a bigger slice of commission.

Repairers start demanding money from the not-at-fault driver once the insurance company refuses to pay the inflated costs or disputes the repair work.

In one case, a smash repairer held a Melbourne man’s car for seven weeks and during that time petrol was siphoned out and the battery was replaced with a cheap second-hand one.

Western Community Legal Centre chief executive Denis Nelthorpe called for tighter regulation around the smash repair industry and legal profession to protect drivers.

“The problem is growing rapidly and there has been significant escalation in the scam,” he said.

The country’s biggest insurance company IAG, which also includes RACV, said the “opportunistic money-making” scam was increasing.

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@AleksDevic