Fleet News

Accident management: Restore trust lost through focus on margins

By Tony Rand, managing director, Vamco

I’ve been in the motor trade for almost 25 years, but even I was shocked to discover that Drive Assist’s collapse left around 100 bodyshops waiting in vain for around £7 million in fees.

As an important link in the com-mercial chain, it is up to the claims management and outsourcing business to provide a solution to this problem and we have a responsibility to ensure this does not happen again.

A number of bodyshops have already gone into administration simply because they cannot afford to write off the money they have lost.

We are outsourced motor claims management specialists, but have never sought or taken ‘referral fees’ from our networks of repairers.

From today, all incoming payments intended for repairs will go straight into a special account operated by Vamco’s legal arm, Kingsley Law Ltd.

We’re able to do this because last month we became the first organisation in our sector to operate an in-house law firm after winning an Alternative Business Structure (ABS) licence from the Solicitors Regulation Authority.

Everyone in our industry knows change is needed, and greater transparency is essential, but people are waiting for the Competition Commission to conclude its investigation.

To me, though, any company wishing to distance itself from the cowboys and the sharp practices needs to act now, not wait 18 months to see what conclusions are drawn and which recommendations are made by the commission
I also think it’s vital that reform is not seen to be imposed from above.

We’ve seen what’s happened in the banking sector when the pressure for change comes from outside, and as a result, the public trust which has been lost is not restored.

We need to restore trust between insurers, claims management companies, bodyshops and even parts suppliers, because it has been eroded by a relentless focus on margins.

Vamco embraced the ABS concept because we didn’t think the traditional structure of using solicitors’ panels worked well for customers – or us.

Now we hope our guarantee of ringfenced monies will give bodyshops and fleet managers the certainty they require.


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Comments

  • Richard - 05/04/2013 20:30

    My own bodyshop employing 30 people and turning over in excess of £2m a year was forced into administration in 2009 entirely due to two major UK accident management companies deliberate policy of making late payments (one was averaging 89 days and the other 127 days) These management companies operate using corrupt commision schemes and force repairers to purchase paint and materials from "approved" suppliers who take a margin and rebate the accident management co. This industry definitely needs some control and regulation.

  • robert morgan - 06/04/2013 18:42

    Congratulations, some one with some some sense and respect. Pitty your the minority.

    • Charlotte Siemonek - 07/04/2013 20:08

      @robert morgan - Thanks Rob.

  • David Ramage - 07/04/2013 20:22

    We at the ABIB are against these practices and have steps in place now to change our industry if necessary through all parties committees in the House of Commons. If anyone wants to know more, look up our group on LinkIn ABIB The Association of Independent Bodyshops

    • David Ramage - 08/04/2013 17:16

      @David Ramage - Finally,Vamco has broken the mould and are doing business ethically, morally and transparently. Well done Vamco

  • Mick Walker - 08/04/2013 11:43

    Too many shops are reliant on the cash flow model and when the paymasters fail the shops have to follow suit. Hopefully this model will support shops on a profit model and allow investment and sustainability long term. Well done Vamco

  • Roland Waters - 09/04/2013 10:40

    The problem is that many Accident Managers working within regulated markets remain as operators without regulatory authority as required under the \FSMA 2000 - hence it may be they are the problem for consumers who may well lauch another PPI style mass litigation to recover their losses from mis-selling regulated advice - the banks thought they could also conduct themselves in a similar way until the £19bn bills arrived? May be not long until the FCA list all the traders operating without the required authorisations?

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