Published this week on, revelations about staged car accidents and the under-belly of the panelbeating industry. Only in Australia though, it’s never happened in New Zealand to our knowledge.  Or perhaps it’s just a matter of time, either way it makes interesting reading.Car accident fraud

Industry ‘must stamp out’ smash repair fraud

Rogue panelbeaters are charging insurers inflated bills for repair work that is, in many cases, deliberately engineered, according to industry experts.

LMI Group MD Allan Manning wants action to tackle the problem, which will affect premium affordability if left unchecked.

“As an industry, we have to stamp it out,” he told “If we are paying fraudulent claims, it’s just another form of organised crime.

“It is staged accidents… they are making good money out of it.”

In one case involving an LMI employee, a panelbeater offered to recommend a workshop if the man wanted some “damage” caused to his utility vehicle, for the purpose of making an insurance claim.

“The whole thing is well known in the panelbeating industry,” Professor Manning says. “The whole situation is taking the sheen off the panelbeating industry and tarnishing the reputation of the many good folk who own and work in it.

“It certainly needs to be addressed by the insurance industry and the police as soon as possible.”

The Insurance Council of Australia (ICA), citing a report by the Consumer Action Law Centre advocacy group, says the problem extends beyond panelbeaters.

“Behaviour by some replacement car hire firms, recovery agents, law firms and smash repairers… can cause confusion, distress and inconvenience to motorists, and push up the cost of insurance for all policyholders,” ICA GM Communications and Media Relations Campbell Fuller told

“ICA is raising these concerns with relevant regulators. ICA also works to educate motorists about their rights and responsibilities in the aftermath of vehicle accidents, to avoid them agreeing to services that may not be covered by insurance, and might result in financial losses and delays in getting their vehicle returned.”

Melbourne private investigator Peter Hiscock, who has worked on such cases for insurers, says racketeering is “massively under-reported”.

“It’s not related to just small individual panel shops,” he told “It may be related to chains of panel shops.”

The Consumer Action Law Centre raised similar concerns in May. It says the problem is partly due to car insurers’ measures to contain spiralling repair costs.

“As insurance companies squeeze the profits of car repairers, a business opportunity has opened up for lawyers to help repairers increase their profits, but the system cannot work without the involvement of the customer/client,” the law centre says.

“Unfortunately, too many clients don’t know what they have agreed to until it’s too late.”

8 Responses

  1. Shane
    | Reply

    Insurance cheats are everywhere. No need to single out the panelbeating industry anyway this does NOT involve reputable businesses (even in Aussie – hah!). But when IAG is only paying $50 an hour for top class collision repairs you have to wonder when the desperados will start the scam in NZ. Remind me again why insurance companies are happy to pay mechanics $120 per hour but only $50 or $60 for a quality panelshop that has probably had to invest half a million in machinery and equipment? Monopaly board rules!

    • Hammer Head
      | Reply

      You got it in one. They do because they can.

  2. Alan
    | Reply

    This is a shocker. The alleged insurance company under-payment argument is not defensible and I don’t think the rate’s that low but certainly if the disparity’s anything like Shane’s suggesting it would be hard to explain.

    I’ve read up a bit more on the crash scam, it seems it is a real problem in Australia but even worse in the UK. I’m certainly not aware of it occurring here. The gist is that the ‘fraudster’ intentionally crashes into an innocent party’s car then a crowd of ‘witnesses’ appear to support the fraudster’s argument that the other party is at fault. They then bully and harass the victim into engaging their panelbeating shop to undertake the insurance claim repairs. All pretty nasty stuff and you’d have to wonder at the time taken to orchestrate the scam! We understand panelbeaters here are experiencing very high work volumes anyway so think the problem unlikely to take root in NZ, but we’ll watch this space. Thanks for highlighting, very interesting.

  3. Suze
    | Reply

    This is as bad as the YOUI insurance scandal and these guys should get nailed too. Haven’t heard of it happening in NZ though, from what I see the collision repair trade here is a legit and high quality industry run by honest hard working people that live for their business, staff and customers.

  4. Villi
    | Reply

    More total rip off. Who knows who these bad panelbeaters are maybe in New Zealand too. Thats why we need expert crash management looking after our accident cars. Thanks guys.

  5. Johnathan Kurrie
    | Reply

    A large body of knowledge has been amassed on how to prevent car crashes, and reduce the severity of those that do occur. See Road Traffic Safety .

  6. John
    | Reply

    Thank you so much for this article! I visit your blog pretty often and I always feel better
    afterwards. I shared this post on Facebook and my friends thought it was great too.
    Anyhow, I just wanted to let you know that I appreciate what you’re doing here.

  7. Gary
    | Reply

    I never really believed these stories til a mate from the UK sent me this link about a huge car accident scam. Can’t really figure out how this is supposed to work but anyway the scammers got nailed big time! Here’s the story.

    ‘Cash for crash’: 81 sentenced in fake car accidents scam

    Garage in south Wales faked accidents in its yards so that bogus insurance and compensation claims totalling £750,000 could be made
    More than 80 motorists have been sentenced over a “cash for crash” con in which a garage faked accidents in its yards so that bogus insurance and compensation claims totalling around £750,000 could be made.
    The final five people to be dealt with over the scam, which centred on a garage near Blackwood, in the south Wales valleys, were sent to prison or given suspended sentences on Friday.
    In all, 81 people aged 23 to 73 have been given custodial sentences, making the scheme one of the most extensive insurance frauds in British legal history.
    Police first began investigating St David’s garage, also known as Easifix, in Pengam, Blackwood, in 2011 over a series of car and motorcycle thefts. As part of the inquiry they found CCTV footage showing a Land Rover being deliberately smashed into a forklift truck.
    CCTV footage from the Easifix garage in Pengam.
    Gwent police launched Operation Dino and officers were surprised at how many people in and around Blackwood and further afield had taken part in the fraud.
    In October 2013 Cwmbran magistrates court closed to all business apart from processing the 80-plus people accused of involvement in the scheme as they made their first appearances. Since then they have been brought in groups before the crown court to be dealt with.
    The garage was run by members of the Yandell family. Byron Yandell, 32, his father Peter Yandell, 53 and wife Rachel Yandell, 31, were among those who have been jailed.
    On Friday a final five were sentenced at Newport crown court by the judge Daniel Williams, who described their actions as “excruciatingly dishonest”. Bethan Palmer, 26, of Newport, Stephen Pegram, 49, of Blackwood, Nicola Cook, 41, of Hengoed, Nicola Rees, 48, of Bargoed, and Stephen Brooks, of Cardiff, were all convicted in connection with the scam.
    Cook and Pegram were given prison terms of 12 months and six months respectively, while their three co-defendants were handed suspended sentences.
    Cook, whose part in the fraud was said to be worth £38,000, said she was too ill to go to jail and claimed prison would have a devastating impact on her family. But the judge said: “You were motivated by greed – to you it was easy money.”
    DCI Richard Williams, of Gwent police, said he was pleased with the strong message the court had sent out. He said: “Hopefully from this day onwards this type of crime will be more difficult to commit. This investigation was very complex due to the number of defendants involved. It was a difficult process.”
    A total of 57 vehicles were involved in the fraud. Williams said: “It not only cost the insurance industry hundreds of thousands but also has probably had a knock-on effect to motorists in pushing up their premiums too. These latest sentences send out a strong message and should act as a deterrent to others.”
    Catrin Evans, head of the Crown Prosecution Service Wales complex casework unit, said: “This ‘cash-for-crash’ operation was a highly organised, calculated and extensive conspiracy to defraud. It involved defendants participating in the arrangement of fake road traffic accidents and insurance fraud.
    “The vast majority of cars supposedly involved in these fake accidents were recovered to a single garage that was at the centre of the criminal operation. A number of members of the Yandell family, who owned the garage, are now serving substantial custodial sentences for the significant parts they played at the head of this organised crime group.”

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