It’s a potentially deadly problem that remains hidden until the need is greatest – faulty airbags. Your customers may be asking questions about the reliability of these systems as this issue receives more publicity, as it did recently during investigative reports on National Public Radio’s “Weekend Edition.”

A review by the National Highway Traffic Safety Administration (NHTSA) of 1,446 fatal accidents from 2001 and 2006 found 255 instances – almost 18 percent – of missing airbags that had not been repaired following a previous wreck.

The issues surrounding suspect airbag repairs are twofold. Outright fraud; in which old shop rags, foam, newspaper and the like are shoved into dashboard cavities; and situations where non-complying components are purchased on the cheap over the Internet. Other scenarios bring to mind a dad assembling a bicycle on Christmas morning: Parts are left over or extra pieces added, with unsuspecting drivers being sent on their way by lax repairers or rebuilders.

“You have to replace the airbag when it is deployed in a crash,” says NHTSA spokesman Rae Tyson. The agency also discovered cases where seemingly intact airbag systems were incorrectly repaired or motorists had ignored maintenance requirements and recall notices.

“Airbag non-deployments are a relatively rare occurrence,” Tyson says. “You have a million cases a year where airbag deployment is successful.”

Others are contending that airbag fraud, the general term applied to both shoddy repairs and willful misconduct, is a serious matter that’s far more common than regulators’ meager “arm’s-length” approach to the compilation of statistics would indicate. They’d like to see Congress hold hearings on the matter and enact a more forceful federal enforcement effort.

A ‘black hole’

The exact extent of unacceptable installations remains unclear, even to the insurance industry. “Airbag fraud is a black hole for data,” says Jim Quiggle, director of communications for the Coalition Against Insurance Fraud, a nonprofit alliance of insurance carriers and consumer groups that is pushing for government intervention. “That’s one of the frustrating aspects of this. Nobody knows how widespread it is, but the warning signals are everywhere.”

“There are enough instances out there for consumers to be concerned. When buying a used car, there is indeed the prospect that it won’t have a functioning airbag,” says Dennis Jay, the coalition’s executive director, citing a proliferation of online sites specializing in selling suspect airbags in violation of various state laws.

“Repairers should not be buying airbags at a discount over the Internet and charging the insurance company full price,” Jay says. “That’s clearly fraud in most states.”

“There’s a market for airbag fraud on the Internet,” concurs Quiggle. “These bags are not being used to line someone’s trash can. They’re being installed somewhere; airbag fraud is a life and death scheme.”

In the trenches

“There is a high incidence of inaccurate repairs,” whether perpetrated by an outright intent to defraud or installation mistakes made by the body shop, according to Doug Hansen, president of Airbag Service, a Bellevue, Wash.-based franchise mobile electronics repair business operating in 30 U.S. metropolitan areas.

“We stumble into it all the time,” he says. “We repeatedly see compromised systems in different markets – so it’s out there.”

To Hansen, it remains “a tough question” whether most faulty repairs are borne of intentional fraud or simple incompetence by the repairer. “Ignorance is the best way to put it,” he observes. “They threw a few parts at it and thought it was good enough.” The components can be wrong for that particular application, the calibration may be off the mark, a part may be missing, or there may be an extra part in there that doesn’t belong.

In most cases of involving a misguided repair, “It’s more like a sensor that didn’t get replaced,” says Hansen, stressing the complexity of today’s airbag systems and the specialized nature of his operation, which travels around to different body shops offering expertise in all manner of interior automotive systems diagnosis and repair. “The calibrations are a real step up in technology,” he explains. “It requires the next level of electronics to repair them properly.”

When asked about the extent of failed airbag installations, Hansen counters with a question of his own: “How often do you see body repairs done improperly? It’s probably the same group of shops.”

There are also instances where Hansen sees evidence of “a physical smoking gun” providing proof that a repairer is out to commit fraud. These perpetrators mostly tend to be salvage operations working with totaled out vehicles or body shops lurking below the radar.

“Every market has somebody doing something unscrupulously because the parts are very expensive,” he notes. “It seldom comes out of a mainstream shop from a fraudulent standpoint.”

A quality shop beset by the difficulties of sophisticated electronics can avoid hassles by relying on the expertise supplied by mobile pros such as his company, according to Hansen. “We have the right diagnostic tools that the typical shop doesn’t have.”

Maintaining ongoing relationships with the assorted automakers’ engineering departments is another facet of the business. “We’ve been very successful at getting the service information,” he says. “It can be challenging because it changes every year.”

This level of cooperation is a two-way street. “We learn a lot from the field,” reports Hansen, “and we feed information back to the OEMs.”

It is a common goal that all vehicle occupants remain safe, he said.

Performing a quality airbag repair should be paramount throughout the industry, a situation requiring the diligence of all involved, says Quiggle at the Coalition Against Insurance Fraud. “The urgency in dealing with this is lacking,” he contends. “People can be driving cars that don’t have functional airbags, and more people will have to die in accidents before people take notice.”

The repairers’ outlook

The repairers we spoke with agreed with Hansen that intentional airbag fraud does not happen in mainstream collision repair shops.

“Any repairer who is running a legitimate shop won’t put their business and reputation on the line by using a used airbag,” says Rocco Avellini, owner of Wreck Check Car Scan Centers. “All of the big time shops in California I’ve talked to say insurance companies are not forcing the issue to use used airbags. None of them have had guys coming by trying to sell used or illegal airbags.”

Avellini, who has been in the collision repair business 40 years and now operates a business that inspects repaired vehicles, said airbag fraud was a bigger problem in the late 1990s, before legislation prohibited installing used airbags in vehicles.

“Back then I was seeing a lot of those cases in Wreck Check inspections,” he says. “Only one or two cases involved fraud from a collision shop. Most of them were rebuilders, who often want to rebuild salvaged cars cheaply. Ninety-nine percent of rebuilders are back yard guys, not professionals. They sell to friends, neighbors and used car lots.”

Name brand auto dealers won’t buy used cars that have been tagged with structural damage or frame damage, Avellini said. “Those cars filter down to the local rebuilder, who is not as fearful of the liability as a major dealer.”

Industry veteran Toby Chess agreed with Avellini that rebuilders are the biggest source of fraudulent auto repairs.

“Most sub-standard repair problems are from rebuilders,” says Chess, national director of the Society of Collision Repair Specialists. “They are buying cars that are total losses and want to fix the car the cheapest way they can and send it on its way. They work under the radar. They are here today and gone tomorrow. They are not held to California Bureau of Automotive Repair license laws.”

As the economy continues to falter, Chess said he fears that repair fraud, not just airbag fraud, could become a bigger issue.

“Customers ask shops ‘what can you do to save me my $1,000 deductible?’ A quality shop won’t do it, but the type of shop that bills the insurance company for OEM parts and installs aftermarket parts will.”

Deployed airbags often are the tipping point that causes a vehicle to be declared a total loss instead of repaired. “It could cost $2,500 to $3,000 to buy and install two new airbags, seat belts, a controller and clock spring,” Chess says. That sends more cars into the salvage market and into the hands of rebuilders.

Mike Orso, president and chief executive officer of Nick Orso’s Body Shop in Syracuse, N.Y., and president of New York State Auto Collision Technician’s Association (NYSACTA), has not seen any airbag fraud.

“We are a Wreck Check shop that’s done hundreds of post-repair vehicle inspections and I’ve not seen any airbag fraud,” Orso says. “New York has been very proactive in not allowing used airbags to be sold, marketed and installed in new vehicles.”

Repairers in New York are required to write on the repair invoice where airbags were purchased and keep a log of airbags they have bought and installed in vehicles, Orso said.