Who should pay for counterfeit airbag replacements?

From Automotive News

By Theresa Clift – 11 Oct 2012

The National Highway Traffic Safety Administration’s industry alert that warned about the proliferation of counterfeit airbags on Wednesday could spark legal debates about who should pay the cost of replacing the potentially dangerous parts.

The National Automobile Dealers Association said although counterfeiters are to blame for the issue, it is consumers who will bear all costs — about $100 for inspection and $750 to $1,000 or more for replacement.

But safety advocate Clarence Ditlow, executive director for the Center for Auto Safety, disagrees.

“Once counterfeit is detected, the original repair shop has to bear the cost of replacing the counterfeit,” Ditlow said in an e-mail to Automotive News today. “If they won’t do it voluntarily, the consumer should take them to small claims court.”

Ohio trial lawyer Dennis Murray agreed.

“If [the inspection shows] it is a bogus device, then of course, the cost burden and replacement cost would be upon the individual repair shop,” he said in an e-mail.

In California, dealers who install a fraudulent airbag and then refuse to pay for the replacement are guilty of a misdemeanor punishable by a $5,000 fine, imprisonment in a county jail for one year, or both. A state law passed last year making it a crime to fraudulently repair airbags, including using a counterfeit airbag.

Other state laws

Another such law exists in Rhode Island, and more states will pass similar laws in the future, Ditlow said.

Dealerships that did not install the faulty airbag are not required to pay for inspection or repair. But Ditlow’s organization believes it would be good business for dealerships to do airbag inspections for free, even if it was installed elsewhere — the way some stores inspect child seats for proper installation.

A diagnostic scan should detect most counterfeit airbags, but it may not detect all of them, so to be sure, the service operation should also do physical inspections, Ditlow said.

Most airbag replacements are covered by insurers, he said.

“Airbags save several thousands of lives annually, but they can’t save lives if they have not been repaired properly,” Ditlow said in his e-mail. “Every year, about 1.5 million airbags are deployed in police-reported tow-away crashes, according to NHTSA.”

NHTSA said it is not aware of any deaths or injuries related to the counterfeit airbags — which also can expel metal shrapnel during deployment.

Only vehicles that may have had an airbag replaced in the past three years by a repair shop not part of new car dealership may be at risk, the safety agency said.

NHTSA believes the issue affects less than 0.1 percent of the U.S. vehicle fleet.

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