Talks On Nrma Dispute

Sydney Morning Herald

Thursday September 1, 2005

Kirsty Needham Consumer Reporter

The NSW Fair Trading office is examining contracts issued to smash repairers by NRMA Insurance after concerns that an online tendering scheme penalised repairers.

The Fair Trading Minister, Diane Beamer, said she would raise concerns about preferred repairer schemes with the Ministerial Council on Consumer Affairs in Canberra tomorrow.

Ms Beamer, who met the Motor Traders Association yesterday and is due to meet NRMA's parent company, IAG, today, said she would push for national action on the dispute.

A Fair Trading spokesman said there was concern that repairers had to tender for work based on photographs on a website which might conceal the extent of damage to a car. If a repairer later sought to adjust a quote, penalty clauses were invoked.

Consumers could also end up out of pocket if they paid an additional premium to choose a repairer, and that repairer cost more than an IAG-preferred quote, he said.

The Australian Competition and Consumer Commission last month approved IAG's decision to remove from its standard motor vehicle policy consumers' option to find their own repairer.

The commission accepted IAG's argument that its system of preferred repairers reduced costs, and that consumers could still elect to pay an additional premium to choose a repairer.

However, the commission did not examine the online quoting system, introduced in July, as part of its investigation.

Fair Trading may refer the issue back to the commission.

Last week the Bankstown state MP, Tony Stewart, said he would propose at the next State Government caucus meeting US-style anti-steering legislation that prevented an insurer from directing consumers to use a particular repairer. Mr Stewart said he believed IAG was unfairly using its market dominance.

© 2005 Sydney Morning Herald

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