Air Bag Fraud: How To Protect Yourself Victims of air bag fraud have found beer cans, packing peanuts and paper where their air bag should have been. Who's watching out for consumers, and how can you avoid such scams?
NPR logo

Air Bag Fraud: How To Protect Yourself

  • Download
  • <iframe src="https://www.npr.org/player/embed/95844517/95876262" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Air Bag Fraud: How To Protect Yourself

Air Bag Fraud: How To Protect Yourself

  • Download
  • <iframe src="https://www.npr.org/player/embed/95844517/95876262" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

LIANE HANSEN, host:

Last week, we broadcast the first part of our investigative series on air bag fraud. We outlined how these schemes work and heard from a victim, a mother of three from New Mexico. Mechanics told her that the used car she bought had been in a serious accident. And she was shocked to learn the vehicle did not have working air bags.

Ms. LYNETTE LORETTO: On the passenger side, they found the air bags stuffed back in the compartment. On the driver's side, they found the air bag plus a bunch of papers shoved back into the air bag. Even just thoughts about that, it just makes my skin crawl.

HANSEN: A Weekend Edition team led by senior editor Jenni Bergal found that some shady auto repair shops did not replace air bags that had deployed in a crash, and that some unscrupulous used car dealers sold customers cars without working air bags. Victims have found their air bag compartments stuffed with beer cans, packing peanuts, and paper. Sometimes the old used air bag is just jammed back in. And sometimes the compartment is empty.

The consequences can be deadly. A mother of three from Kansas City died when the air bag in her used minivan failed to deploy during a crash. The van had been in a previous accident, and the air bag was never reinstalled. Later in this report, we'll learn how inconsistencies in state laws make it hard to crack down on this serious crime, and we'll point out ways consumers can protect themselves against air bag fraud. But first, we recently visited a reputable auto repair shop to ask what customers need to know.

(Soundbite of drilling)

HANSEN: Tiffany Duncan is the general manager at Elite Auto Haus in Silver Spring, Maryland. She had several suggestions to help consumers figure out if there is something wrong with their air bags.

Ms. TIFFANY DUNCAN (General Manager, Elite Auto Haus, Silver Spring, Maryland): As a consumer just glancing at it, I mean, you want to look to see if anything obvious, like for instance, you could look at the dashboard and see on a passenger air bag if around the perimeter of the air bag itself, if there's like a tiny split in the dash. Sometimes from the impact of the deployment of the air bag, it will tear the dash just a little bit. Also, the air bag lamp would be on, indicating that something's not right. The seatbelts should retract normally. If they're slow in retracting or if they don't retract at all, that's a big warning sign that the air bags have deployed and that just hasn't been replaced.

HANSEN: The best way to know whether your air bag is safe is to take it to a certified mechanic whom you know and trust.

Ms. DUNCAN: It doesn't take very long for somebody that knows what they're looking at to briefly look over the car and check the obvious stuff, you know, such as the air bags, any bodywork or mechanical repair, and see if the vehicle is in good condition.

HANSEN: Consumers need both seatbelts and working air bags to protect themselves in a crash, and most auto repair shops and used car dealers install new air bags correctly. But insurance fraud experts warn that some don't. They say shops bilk insurance companies by charging them for new air bags and then don't put them in. They sometimes order new air bags, bill the customer, and then return the bags to the manufacturer for a refund. Tiffany Duncan says consumers need to be careful. They should not put a used air bag or one they bought online into their car. She and technician Claude Olivera(ph) explain the intricacies of installing a replacement bag properly.

Ms. DUNCAN: You have to resynchronize the system to read that air bag.

Mr. CLAUDE OLIVERA (Technician, Elite Auto Haus in Silver Spring, Maryland): Yes.

Ms. DUNCAN: The control module has to be reprogrammed to read the sensors.

Mr. OLIVERA: Correct.

Ms. DUNCAN: Everything has to be recalibrated so it will react in the exact timeframe that the manufacturer originally designed the vehicle to react in. Because if it wasn't done properly, they may still deploy, but not in a tenth of a second. They may deploy in two tenths of a second. And sometimes that's too late.

HANSEN: It sounds awfully complicated. Is it?

Mr. OLIVERA: Yes.

Ms. DUNCAN: Yeah. I mean, actually installing the air bag isn't. It's two bolts and a plug of a wire. But resynchronizing everything, you should definitely be a professional.

HANSEN: Manufacturers also require that other repairs must be made when an air bag is installed, such as putting in sensors, control modules, and new seatbelts. And there's no way to know if this has been done correctly just by looking at the car. An air bag that hasn't deployed can also be dangerous for consumers in some cases. Cars that have been flooded, like those in Hurricane Katrina, have been sold by used car dealers who didn't disclose the vehicles' history. Unsuspecting consumers may have no idea that the air bags are damaged and useless. These salvaged cars and those that have been totaled in accidents have been sold at auction or repaired and have shown up at used car lots.

No one knows the number of people who have been victims of air bag fraud, nor does any agency or the insurance industry collect data to show how often this occurs. But in January, the National Highway Traffic Safety Administration issued a report that reviewed more than 1,400 fatal crashes. It found that in nearly a fifth of the cases, the air bags had not been replaced after a prior accident. An agency official says they didn't look into why they were missing, but they believe that at least some of those cases involved air bag fraud.

One of the biggest problems is that each state has a different way to deal with air bag fraud. Auto insurance is regulated by states. So are auto repair shops and used car dealers. Some states have made it a felony to sell phony air bags. In California, for example, violators face up to a year in prison and a $5,000 fine. In other states, there are no laws at all. Jim Quiggle is director of communications for the Coalition Against Insurance Fraud, a nonprofit alliance of insurance companies and consumer groups.

Mr. JIM QUIGGLE (Director of Communications, Coalition Against Insurance Fraud): You never know what laws are from state to state. It's a big mishmash. The feds have taken a hands-off position on this, and they're leaving it up to the states to decide what the standards should be, about what legally you can and cannot do in terms of installing air bags.

HANSEN: Where's the consumer protection agency in all this?

Mr. QUIGGLE: That's a good question. I mean, each state, you know, has its own standard of how close it's going to look on this. And even though the states are passing laws that are tightening the noose around crooked transactions, the fact is that this is still not as high a visibility issue. The fraud is hidden inside an air bag compartment, away from prying eyes. It's not there in the open.

HANSEN: Car owners can use some tools to research their vehicle's history. Private companies like CARFAX allow a consumer to check its database to see if a car has been in a prior accident. But not all cars can be found there. Next year, consumers in every state will be able to access a U.S. Justice Department database. It will provide information about cars that have been totaled in crashes or damaged in floods. Insurance companies and junk and salvage yards will be required to submit data about those cars every month. Quiggle says that even with these tools, car owners can still become victims. And if that happens, he says, they need to fight back.

Mr. QUIGGLE: The first thing you do is you go to the attorney general's office. You go to the state insurance department if it looks like this is a bogus insurance claim. You go to the local police. You go to every law enforcement agency in the book to try to out the provider of the scheme.

HANSEN: In the end, it's buyer beware for consumers who must educate themselves and always be on guard. That's a lesson Lynette Loretto learned all too well. The mother of three who lives in a pueblo near Albuquerque, New Mexico, was so angry when she found out her used Chevy Cavalier had no working air bags that she felt she had to take action. She sued the dealer who sold her the car. The dealer settled the case for an undisclosed sum but did not admit fault. Loretto warns that if consumers don't do their homework, they can end up victims too.

Ms. LORETTO: Be very cautious of who you're buying the car from. Looks aren't everything. You got be careful. You got to make sure of the history of the car. And just don't be embarrassed, take somebody, ask them for their advice if they know more about cars than you, because it'll help out in the long run.

HANSEN: Do you consider yourself a victim of air bag fraud?

Ms. LORETTO: Yes, I do. And I'd really like to have people hear my story because I don't want anybody else to go through what I had to go through, especially if they have children.

HANSEN: Our story was reported by senior editor Jenni Bergal and produced by Weekend Edition's Charla Bear. You can get tips on how to detect air bag fraud and check to see if your state has laws to protect you at npr.org.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.