Class action looms against NRMA

News

A group of New South Wales repairers have reacted vocally to what they perceive to be unfair and discriminatory actions by NRMA Insurance after the company acted to drop many repairers from the Competitive Partner scheme and aimed to stop using the 'Known Repairer' processes with these shops. NRMA has since dropped its plans to cut the 'Known Repairer' processes originally planned to start on 9 November which would have meant replacing them with cash settlement procedures.
One of the group of repairers, Eddie Bourjian of Zenith Auto Body Shop, in Artarmon, Sydney, believes NRMA's actions could breach the Monopolies Act and are discriminatory against both repairers and policy holders. "NRMA has taken away the element of goodwill in our business and the customer is not being informed sufficiently of their ability to choose their own repairer," he said.
The group of repairers are already claiming some success after they sought to take out an injunction to stop NRMA from severing relationships with non-Competitive Partners, after which NRMA re-evaluated the situation. Bourjian said Channel Nine's A Current Affair was due to highlight the group's complaints and the ABC is also interested in the issues raised by the group.
"It is important that we inform the customer to be wary. The trust and the credibility they may be placing in their insurance companies may not always be worthy of it," Bourjian said.
In a letter to Tim Early, Competitive Partnering manager, assessing, Metro North for NRMA, Bourjian states; " . . . the system of selection in the absence of specific detailed explanation is discriminatory and victimising as most of the recognised repairers have not been rated by the NRMA in order to establish their viability in the same manner as currently selected NRMA preferred or competitive repair shops. We wish to emphasise our gravest concerns to the negative and detrimental effects that our industry is being subjected directly, contributed by NRMA's (being the largest motor vehicle insurer in NSW) newly adopted business practices."
The group is to employ a full-time administrator, organising meetings and preparing newsletters and is considering launching a class action lawsuit against NRMA in light of its recent actions.
Some members of the group allege that NRMA has done everything in its power to 'steer' customers to certain preferred shops, including verbally threatening policy holders with cancellation of their policy should they go to another repairer, and claiming the computer system is down in order to slow claims procedures in a non-preferred business. In addition to this, some repairers claim NRMA should be informing its customers that its parts policy includes the regular use of non-genuine parts. Parallel parts (genuine parts brought into the country via a different route) are preferred by NRMA over new OEM parts in every repair but repairers claim it is near impossible to obtain so-called parallel parts and NRMA is pressuring or incentivising shops to use non-genuine.
Two recent examples in the US point to the need for action in Australia, claim some of the group. State Farm lost a $US1.2 billion class action suit against it after it used non-genuine parts without informing the policy holder, and in Florida, county legislators now require insurers to explicitly inform customers that they are not obligated to choose a repairer within a direct repair program. Whether these issues have relevance in relation to NRMA may be a matter for the courts to decide, should the group of repairers feel the need to resort to legal action.
Bourjian believes the only way progress will be made in the fight for repairers' rights is if enough repairers band together and he is calling on other businesses throughout New South Wales and further afield, to show support. "The next level of all this is to actively seek more support from other repairers to make this a credible campaign and enable us to afford expenses," he said.
In response to the attack from the NSW group, NRMA Insurance issued this statement to Paint & Panel: "NRMA Insurance is moving to a simpler smash repairer arrangement because Known Repairer and Competitive Partnering programs are expiring.
"Customer choice remains the cornerstone of the ongoing arrangements which see all Known Repairers and Competitive Partners automatically become Associate Repairers. There will now be two simple categories -- Preferred Smash Repairers (PSRs) and Associate Repairers.
"The repairs by NRMA Insurance offer Associate Repairers the opportunity to work towards PSR status.
"All Competitive Partners and Known Repairers are being invited to be Associate Repairers, now these schemes are expiring or have expired. This was done in December."
Meanwhile, NRMA has trumpeted the first anniversary of its Preferred Smash Repairer scheme as a resounding success.
Claims and assessing manager Paul Pemberton said NRMA Insurance is celebrating the success of the Preferred Smash Repairer program because it has exceeded expectations for delivering excellent customer service.
"It is pleasing to see that every week, more and more customers are calling us first on 131 123 after being involved in a collision to identify a Preferred Smash Repairer in their local area," he said.
A recent NRMA Insurance survey revealed 96 per cent of customers are satisfied with the quality of Preferred Smash Repairers' work said the company. About 83 per cent of customers found service throughout the entire claims process either met or exceeded their expectations.
In a survey of Preferred Smash Repairers, most of whom are small, family-owned businesses, 97 per cent said they were happy with the program, more than a third had employed extra staff and 50 per cent had invested in new technology to improve efficiency.