News release

Calif. Enacts New Airbag Fraud Law In Growth Trend

9/28/2016

States racing to enact laws criminalizing installing worthless knockoff bags

imageWASHINGTON, Sept. 28, 2016 — California became the fourth state to enact a life-saving law criminalizing airbag scams this year in a spreading trend, the Coalition Against Insurance Fraud announced.

Gov. Jerry Brown signed the nation’s most-expansive airbag bill into law this week. The measure makes it a specific crime to market knockoff airbags, and install counterfeit airbags, safety belts or other parts of a vehicle’s safety system.

“Deflating airbag scams is a public-safety priority. Installing knockoff airbags is a virulent insurance scam. It jeopardizes the lives of motorists who lose this vital protection in crashes. We applaud Gov. Brown for this forward-reaching vision,” said Howard Goldblatt, director of government affairs for the Coalition.

California taps a national trend. Washington, Maryland and South Carolina booked airbag-fraud laws earlier this year. Fully 14 states have enacted similar airbag laws in recent years. They generally make marketing and installing counterfeit bags in vehicles a specific crime.

The Coalition and Honda North America are partnering in lobbying statehouses for the new laws.

California goes beyond solely airbag scams. Its new law covers installing knockoff parts involving the entire safety system.

Pennsylvania is considering an airbag-specific law. The outlook for enactment is promising. The measure has cleared the state House, and the Senate is discussing passage.

“Ethically challenged repair shops pocket a large and illegal profit. The scam defrauds consumers and insurer, helping keep premiums higher for honest drivers in Pennsylvania,” Goldblatt wrote state Senate majority leader Jake Corman this week in urging swift passage.

Insurance scam: Dishonest body shops can make large profits by installing knockoff airbags in vehicle repairs. They can easily buy knockoffs on the black market or mainstream sites such as eBay or Craigslist. Counterfeits cost just a few dollars, while shady body shops charge auto insurers $1,000 or more for legitimate manufacturer originals.

Safety jeopardized: Motorists face a serious safety peril. The knockoffs generally won’t open properly in a crash. Drivers have died and been injured in crashes involving non-functioning counterfeits or fraudulently removed airbags. Knockoffs also spewed shrapnel at crash dummies in federal tests.

Flood U.S. market: A Chinese national named Dai Zhensong tried to flood the U.S. with fake airbags made in his factory in China. They looked like legitimate models from mainstream carmakers.

Thousands of airbags made it to the U.S. Many could’ve been installed on vehicles. Zhensong’s network was dismantled and he received 37 months in federal prison.

“Airbags protect us from serious injuries or worse. Motorists rightfully expect airbags will protect us in crashes. Bogus airbags jeopardize that expectation,” Goldblatt said.


CONTACT:
Howard Goldblatt, director of government affairs, 202-393-7332;
James Quiggle, director of communications, 202-393-7331;