Autobody shop banned from making insurance repairs by regulator

The Financial Services Regulatory Authority of Ontario (FSRA) has banned McLaren Collision from doing any work that is reasonably expected to be paid for by an insurer, either directly or indirectly, and fined the autobody shop $75,000. It also fined Fady Warda, who worked for McLaren, $15,000 after it was discovered that he damaged a vehicle taken to McLaren for repair, increasing the amount it charged the insurer for repairs.

“The compliance order prohibits McLaren and Warda from engaging in the business of insurance. They are not allowed to perform work that is reasonably expected to be paid by an insurer or hold themselves out as being able to perform such work. These restrictions apply to McLaren permanently and to Warda for three months.” 

The fraud was found out after Aviva Canada arranged to have two motor vehicles damaged in a way that simulated a collision. The damage was appraised by a third party for the purposes of the investigation and the vehicles were equipped with hidden video cameras. After being driven by private investigators to pre-arranged locations to stage the collisions, the vehicles were towed to McLaren for repairs.

Appraisals of both vehicles were conducted by an Aviva staff appraiser, Michael Wetzel, who was not aware of the investigation. 

In the first instance, Wetzel appraised the damage at $4,880.32 and McLaren invoiced Aviva for $4,208.02. In the second instance, Wetzel appraised the damage at $9,862.75 and the shop invoiced Aviva for the same amount. When Aviva’s investigation appraiser reevaluated the cars, it was found that the work completed was valued under $2,400 in both instances. It was further found that McLaren invoiced for damages that didn’t exist during the original damage appraisal and that McLaren invoiced for replacement parts that were not replaced and invoiced for repairs that were not completed. Another third-party engineering firm confirmed those findings.

A review of the camera footage also shows Warda repeatedly striking the car’s fender and raised hood with a large object.

Wetzel did not request a hearing. FSRA imposed an order issuing a monetary penalty of $50,000 against the former appraiser in November 2020. Proceedings are ongoing against Rony Warda, who is also named in the regulator’s notice of proposal.