Bodyshop unpaid risk
April 9th, 2009 by Richard Aucock
RMIF executives have warned vehicle body repairers to urgently review their contacts – or risk going unpaid for work they have carried out.
The car dealer body says companies sourcing work from accident management companies should take a close look at contracts, to ensure payment is guaranteed.
This is due to the risk of work providers collapsing in current tough economic conditions.
Some accident management companies, explains the RMIF, do not separate repairers’ funds from their own funds. This lack of separation means payments are at risk if the company goes under.
Warning signs, says the body, are if the company asks to extend credit days, or alters the terms of the arrangement.
‘The RMIF has petitioned for repairers funds to be held separate to accident management companies own funds, and would like to see the same across all work providers,’ explained RMIF director Sue Robinson.
‘Bodyshops must remember that a job is not finished until it is paid for. Businesses can usually be confident with major insurers, but may need to be more diligent when seeking payment from minor insurers and accident management companies, who may not release payment immediately.
‘When an intermediary is involved, payment due to the bodyshop should be off balance sheet, or ring fenced, or in an ESCROW account. The industry can well do without another ARMS problem – where, following the collapse of the accident management company, many bodyshops were left unpaid for work performed.’
Support from the RMIF, she assured, is there for members who need it.
‘The RMI’s Bodyshop Services Division continues to worked on behalf of the industry on this issue.’
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