Farmers Says Northern Calif. Auto Glass Business Involved in Scam

February 24, 2006

Farmers Insurance Exchange has begun serving civil summons and complaints upon Redding, California auto glass company Onsight Auto Glass and its owner, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders.

The civil complaint seeks not only damages for the fraud allegedly committed, but seeks injunctive relief, where the courts are asked to order a halt to these deceptive practices.

Outlining a highly unusual and aggressive billing scam, the lawsuit details how the alleged perpetrator deliberately over-billed Farmers for services on 455 occasions.

As alleged in the civil complaint, the defendant created a sham office in a remote area, so it could manipulate its billing. In fact, the only things located where the shop is claimed to exist were abandoned mines and a shack. There was no electricity, no running water and certainly no auto glass business. Under national guidelines, automobile glass claims are paid at a premium if the shop is located in less densely populated areas. As explained in the complaint, defendant created documentation that the shop was located in a remote area, so it could charge Farmers significantly more.

Farmers developed evidence reportedly indicating that 81 percent of the money paid to Onsight Auto Glass involved fraud. Farmers' Special Investigations Unit confirmed its suspicions through witnesses and documented the suspected fraud.

Following its investigation, it became clear that no glass work was done from the alleged shop location. By pretending to have a shop at this address, the defendant reportedly was able to falsely charge more for its work.