A Look at Shop Licensing

There is a collision shop about one half mile away from your shop that creates a continual headache for you. You are not afraid of good competition, in fact you welcome it, but this guy doesn't know what the words "good, fair or honest" means. You have looked at cars he has repaired and found that recycled parts where used when the shop was paid for new. You have seen bad and unsafe welds. You are pretty sure that he is using stolen parts, but you can't find any government agency or insurer that is willing to follow-up and at least investigate. You have heard that he pays his people under the table so he doesn't have to carry workers compensation. If it is illegal, the shop is probably doing it. The shop is giving the collision industry, which of course includes you, a bad name. The shop owner charges the same as you do, but a ton of money goes to pay off anybody with their hand out. Many insurance adjusters have told you about some of the things they have seen, but their hands are tied also because their companies tend to look the other way unless a customer complains.

Insurers have a stake in what is happening at your thieving neighbors shop, but maybe for fear of lawsuits they don't want to get involved in any investigation. Your state attorney general says if you can prove unfair and deceptive practices they will be happy to go after the guy, but you can't find any customers willing to turn the guy in. You are very angry and frustrated.

What you probably need in your state is an effective shop-licensing program tied to mechanic certification to help get rid of thieves like your neighbor.

In the next couple of weeks that is what we are going to look at. First this morning we will discuss shop licensing, what is good and what is better. In the next couple of weeks we will discuss the value of mechanic certification and finally we will try to tie it all together, because getting rid of bad competition and policing your own industry is one of the problems collision repairers can do something about. And the insurance companies might even help to make the laws you propose more effective.

There are three ways to introduce a repair shop licensing law to your legislature. You can have some consumer group do it because of all the complaints they hear about auto repair, but you will have little, if any, input. You let government do it, but well I guess you already know what happens when government sticks their neck into an industry they don't understand. Or the best way, have the repair industry suggest the language for a new law to license and regulate repair shops. Obviously the last way is the best.

Shop licensing can be relatively easy to get passed into law because it generates revenue for the state, which they love and if the license fees aren't excessive you won't have a big fight from some of the repairers themselves. But, to have a good license law, it will take a lot of extra effort. It is not enough for a shop to simply have to pay a fee to receive a license. The law must have some teeth in it. If a shop violates the provisions of the law one of the penalties must be that the shop can be put out of business. The governing agency must also have the ability to put a shop out of business if they don't register.  Without the fear of losing ones business I am afraid that too many shops will just refuse to comply.

The licensing authority must also be fair. An arbitration panel should be part of the law. The panel should be made up of consumers, repairers, government, and perhaps insurers. Although presently there aren't any states that require it, a shop should have the equivalent of CIC Class A certification to open a collision repair facility.

I know that no one really likes government regulation, but where else are you going to go if you want to really clean up the repair business.

In future issues we will also look at some of the laws on the books. We will review the law that was passed in the U.K. (see Mail Bonding notes in this issue), we will look at Michigan and California which have had repair laws on the books for over twenty years. We will even look at any other state that has a law that deals with shop licensing or mechanic certification.

I hear from readers all the time who have complaints about shops in their areas that, shall we say, are barely legal. Shop licensing done the right way can help alleviate this problem.