Connect with us

Whistleblower reveals that Japan’s Big Motor is not the only company responsible for fraudulent auto insurance claims


Whistleblower reveals that Japan’s Big Motor is not the only company responsible for fraudulent auto insurance claims

Used cars lined up at a Big Motor store in July 2023, photographed by Kota Yoshida

Following the incident of fraudulent insurance claims by Big Motor, a used car sales and repair chain that was involved in a scandal, the Mainichi Shimbun received a whistleblower complaint from a dealership that had not previously reported fraudulent insurance claims, and a series of incidents were reported. has come to light. .

G-after, a used car dealership based in Tokyo, was established in 2007 and has six stores in the Kanto region. The company touts “the ultimate price destruction” on its website, and credit bureaus say its sales have soared in recent years.

A male employee of the company spoke to the Mainichi Shimbun. “I’ve felt uncomfortable about this for a long time,” he said, holding internal documents in hand. He presented the company’s reports and insurance estimates regarding its response to vehicle damage and exposed the company’s illegal activities. The 2022 document summarizes the repairs required for vehicles following single-vehicle accidents caused by drivers. The repair fee sent to the insurance company was approximately 480,000 yen. However, the actual repair cost was only about 150,000 yen, and the dealer collected the difference of about 330,000 yen as profit.

According to documents from the sheet metal and painting company (above), the repair estimate was 148,720 yen, which is significantly lower than the insurance claim amount of 479,364 yen in the G-after-sale estimate. (Mainichi/Kenji Ikai) (Image partially edited)

Why was there such a large difference between the repair cost and the billed amount? Another employee familiar with G-After’s repair work provided specific details to the Mainichi Shimbun. The dealership does not have sheet metal equipment, and when customers request repairs, they outsource the work to sheet metal and painting subcontractors.

According to employees, the chiropractor will give you quotes for cheap and expensive work. Replacing a broken part with a new part will increase the price, but if you repair it without replacing it or use a used part, it will be cheaper. A high estimate will be presented to the insurance company and the claim will be paid. However, the dealer hires a subcontractor to repair the car at a lower price and keeps the difference as profit.

The difference in price was approximately 200,000 yen per unit. The employee said fellow dealers were aware that they could profit from insurance claims.

“At least where I work, these fraudulent claims were made for almost every vehicle involved in an accident,” the employee said.

Not only did the company deceive insurance companies, but it also lied to customers that it had repaired it with new parts. An employee reveals, “Cars that are not properly repaired lose value, and even if you trade them in, the price will go down.We have also received complaints from some customers.”

This image, posted from a group on the messaging app LINE, shows the “agreed amount” for the insurance claim of 479,364 yen, the repair cost of 148,720 yen, and the difference of 330,644 yen as “our profit.” There is. (Image partially edited)

Is it possible to prevent such fraud?

A source from a major insurance company said, “It’s difficult to judge what kind of repairs were done just by looking at the appearance of the repaired vehicle.If you really want to detect fraud, you need to monitor the entire repair process.” do. . ” A whistleblower interviewed by Mainichi Shimbun added, “Insurance companies don’t take the time and money to investigate, so there’s no way they’ll be exposed.”

The employee said, “The company has a culture of doing whatever it takes to make a profit, so it was natural for me to do the same.” He said he agreed to the interview because he wanted to “clean up the industry.”

The Mainichi Shimbun sent a letter of inquiry to G-After about the fraudulent billing, but the company responded, “After internal consideration, we will refrain from commenting.”

Calling for greater industry transparency

It was discovered that employees at Big Motor intentionally damaged vehicles with sandpaper and golf balls, and had unnecessary bodywork and parts replaced to cover insurance claims. This behavior stemmed from a corporate culture that pushed employees to meet sales targets.

Big Motor President and Hiroyuki Shige (at the time) bows his head at a press conference in Minato Ward, Tokyo on July 25, 2023. (Photo by Kenji Ikai)

In the wake of this scandal, other fraudulent insurance claims were uncovered at various companies.

At Nextage (Nagoya City), a major used car sales company, several employees who had a poor track record of paying insurance claims asked their friends for help and took out voluntary insurance in their names on trade-in cars. There was also a case where a driver made it look like a tire was flat and used the photo to apply for compensation.

Nextage commented on the background of the fraud, saying, “We were unable to dispel the idea that employees’ salaries are prioritized based on their sales performance.” The company announced that it will abolish all sales incentives going forward as a measure to prevent a recurrence. President Koji Hamawaki, who came from Big Motor, resigned in September.

Goodspeed (Nagoya City), a major used car sales company, announced that out of 1,051 insurance claims made in the four months starting from April this year, 30 were inappropriate claims, totaling approximately 630,000 yen.

Ministry of Transport officials on their way to inspect Big Motor Urawa Misono store (Midori Ward, Saitama City) on July 28, 2023 in Midori Ward, Saitama City (Photo by Kentaro Ikushima)

Even if the originally required work, such as painting or removing and installing parts, was no longer necessary, the company calculated insurance benefits based on the original repair details. The company explained that “checks were insufficient.”

The Japan Used Car Sales Association Federation (Shibuya-ku, Tokyo), which has approximately 10,000 used car dealers nationwide such as Big Motor and G-After, has announced that it will become a member company as soon as it confirms the details of the regulatory authorities’ measures against Big Motor. He announced a warning. authorities. A representative commented, “We will work with insurance companies to respond.There is a need to increase the transparency of the vehicle insurance system.”

[Taisuke Shimabukuro, Toshiaki Uchihashi]

* * *

The original article in Japanese was written based on information submitted to the journalism on-demand submission form “Tsunagu Mainichi Shimbun.” If you have a theme you would like us to cover, please contact us at

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

More in Blog

To Top