A motor insurer has come under fire in court for ramping up charges for vehicle repairs in order to boost its own profits.
Judge Platt at Romford County Court has strongly criticised the way a major motor insurer, Royal and Sun Alliance (RSA), recovers the costs of repairing vehicles.
Judge Platt said Royal and Sun Alliance has used a subsidiary which inflates charges simply to boost profits.
He found the subsidiary increased labour costs without carrying out any work itself and made other charges it could not account for.
RSA Insurance said it strongly refutes any suggestion that it has acted inappropriately.
In the case of RSA Insurance, the garage invoice is passed to its subsidiary, RSA Accident Repairs Limited, which then sends a separate bill to the at fault insurer. Insurers are not supposed to make a profit from repair work.
However BBC Radio 4's Money Box has learnt several insurers are disputing the size of claims being put in by RSA Insurance via its subsidiary RSA Accident Repairs Limited and are refusing to pay, claiming the subsidiary has added its own charges to the original garage bill which cannot be justified.
Click here for the BBC's article:www.bbc.co.uk/news/business-14946628