Blumenthal Urges Attorney General To Investigate Auto Insurance Scheme That May Put Consumer Safety At Risk

Statement

Following a CNN investigation uncovering new evidence that auto insurance companies may be directing repair shops to use cheaper and possibly more dangerous parts, U.S. Senator Richard Blumenthal (D-Conn.) sent a letter to Attorney General Eric Holder, urging the Department of Justice (DOJ) to investigate. Blumenthal wrote that auto-insurers may be pressuring consumers to repair their vehicles at their preferred repair shops, which have agreed to use cheaper parts in order to save the insurance company money. In the letter, Blumenthal requested the DOJ investigate auto insurance practices that are not only possibly illegal, but that may also seriously compromise the rights of consumers and put the safety of our roads, motorists, and passengers at risk.

"Contrary to what consumers may be led to believe by their insurers, repair shops preferred by insurers do not necessarily equate with quality repairs," Blumenthal wrote. "It seems to be common knowledge among auto repair shops that the best way to land a coveted spot on an insurer's preferred list is not necessarily by delivering consistent, quality service, but by agreeing to charge below-market labor rates and use cheaper, salvaged, used, or even counterfeit parts of questionable quality and safety."

Unfortunately, many consumers are also being misled into thinking that they are required to have their car repaired at one of these shops. This has the harmful effect of limiting consumer choice, creating a serious safety risk, and suppressing competition in the auto repair industry."

Over 5 decades ago, the DOJ issued a consent decree to stop auto-insurers and repair shops from corroborating and deceiving consumers. In the letter, Blumenthal requested the DOJ determine whether insurers are in violation of the 1963 consent decree or any other federal laws.

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