Finding a cheat that uses the warranty claim system to enrich themselves is always a nightmare. But that is just one area for someone to cheat, and a thief rarely stops at just warranty claims. Last week while working with a reader through an audit that uncovered warranty fraud, this truth came to the surface.
A strong stand with regard to honest dealing with your warranty
repairs can set the tone for an entire shop. Warranty is one of the best
indicators of dealership performance. During the course of an investigation, review or audit, if Ford finds less than honest warranty claims they immediately begin to worry about the dealership's operations and about the dealership in general. If someone is willing to steal via warranty claims, then they are probably stealing via internal and customer pay repair orders as well.
Back to our fraud audit, I was struck by the impressive security measures that the dealership
employed at their facilities. The lot was closed behind locked gates and patrolled by a watchman at night. The corners of the building all sported cameras and high intensity lighting. It seemed that they had
everything to protect the store from that rogue night thief or armed robber. While that might all be necessary, especially given the rough neighborhood this store is located in, it seemed highly out of sync from what was happening inside and on their warranty claims.
It was the same old story: two techs had figured out how to steal via warranty labor time. For over a year they were nearly 200 percent efficient and this trend showed up on the store's 126 Report. It just seemed that everyone was so attentive to what was happening outside the store, that no one thought to have a small amount of protection for the inside.
Consider warranty claims your early warning system. If you think someone will only use factory claims to steal, you ought to think again. It is almost certain that they will employ their lack of honesty in other areas.