In the wake of the recent Channel 4 Dispatches documentary on the UK insurance repair market, Retail Motor Law and the Vehicle Builders & Repairers Association have made a formal complaint to the Office of Fair Trading accusing RBS Insurance and a leading paint company and distributor of price fixing. The complaint has been passed to the Competition Commission as part of its investigation into the private motor insurance market.
Andrew Moody, MD of Retail Motor Law was invited to address an all party Parliamentary Group on Insurance and Financial Services following his appearance on the informative TV programme. During his interview Andrew made public that in July 2012, RML and the VBRA submitted a formal complaint to the OFT alleging that RBS Insurance have been engaged in a price fixing agreement contrary to the Chapter 1 prohibition of the Competition Act 1998. He also revealed that as long ago as July 2010, Andrew Moody wrote to Stephen Hester, chief executive of RBS, warning that confidentially negotiating a discount and rebate system with a paint manufacturer could ‘prevent, restrict or distort competition in the crash repair market’.
Andrew Moody commented, “Price fixing is an extremely serious allegation but I firmly believe I have sufficient evidence to substantiate the complaint. I had hoped to resolve my concern by working with RBS, but they refuse to engage with me.”
Responding to the allegation, Graham O'Neill, chief executive of distributor ACIS Ltd, said, “ACIS Limited believes in free and fair competition. The company's success is based on providing our customers with the benefits of free and fair competition. Our trading arrangements comply with United Kingdom and European Union competition law.”
Andrew Moody’s concerns include, compelling repairers to buy certain paint brands, insisting repairers purchase a minimum amount of paint per vehicle and insisting that repairers only purchase from a designated distributor. He commented, “In March 2011, I completed a report on paint supply and I believe that certain agreements, and/or concerted practices, seemed to have as their object the prevention, restriction or distortion of competition. Further, it is possible that certain ‘rebate’ payments might constitute a bribe under the Bribery Act 2010.” He adds, “The evidence suggests that RBS is profiting from these rebate agreements while hundreds of small repair businesses are closing, ruining peoples’ livelihoods and damaging local communities. The end result is that consumers are left paying a high price for, in some instances, substandard and unsafe repairs. We now wait to see what action the Competition Commission will take.”