Monthly SPOTLIGHT!

Repair Orders: Get it Right by Writing it Right

"Unusual Circumstances"

 

Hello Industry Members:

 

With this month’s installment of our series on “Get It Right by Writing It Right” we are focusing on Unusual Circumstances and Additional Authorization. During this series of articles, we have been looking at the Bureau of Automotive Repair (BAR) Regulations and how they relate to successfully transacting with your customers. This article is more about covering your assets when documenting Unusual Circumstances and Additional Authorization.

 

BAR requires 7 items when documenting Additional Authorization or Unusual Circumstances. First, you must understand what they are:

 

Auth. By       How Contacted     Date   Time          Reason              Addl. Cost        Revised Total

________    ____________     _____   ______  _____________   $ _________   $____________

 

  1. Who was contacted for authorization. (Auth. By)
  2. How were they contacted. (How Contacted). In person, phone #, text or email etc.
  3. The Date they were contacted.
  4. The Time they were contacted.
  5. Specification of the additional work (Reason). Brakes, water pump, warranty repairs, Etc. 
  6. Additional Cost. Total parts and labor amount for the additional work.
  7. Revised Total Cost.  The original estimate amount plus the additional cost, totaled together.

Unusual Circumstances are the situations where your customer’s vehicle is towed-in or dropped off after hours. In other words, when the customer isn’t present. What is required before you perform any type of diagnosis, repair or services to the vehicle is that the facility must contact the customer and receive authorization to perform the diagnosis, repairs or services.  This doesn’t make any difference if it’s a customer pay, warranty repair or a no charge service.  This authorization is to be documented on the final invoice. For these situations, follow the 7 items above.  Items 6 and 7 will be the same amount for Unusual Circumstances.

 

Example of How to Document Unusual Circumstances:

 

  • 8-14-19 at 9:10 a.m. Spoke to Susie XXXXX at 111-111-1111. Inspect for noise when coming to a stop and oil & filter change service, $90.00 + tax. Towed-In.

 

Recommendations: When contacting the customer via text or email, notate “text” and the “phone number” or the “email address”. As stated in last month’s article, include tax in your estimate amount or a Plus Tax statement. Additionally, state if the vehicle was towed-in, dropped off after hours, etc., which gives a better picture as to what is going on.

 

Additional Authorization: Most of the industry thinks that Additional Authorization is due to a change in the estimate amount. First, you must understand that you are changing the method of repairs, second is the change in the dollar amount.  In our prior example the vehicle came in for inspection of a noise when coming to a stop. The change in method of repairs is from the inspection to the repair. This requires customer authorization. Second, it doesn’t matter if the estimated repair amount is more or less than the original estimated amount. The facility must gain authorization from the customer to change from an inspection to the repair and the prior noted above 7 items of Additional Authorization needs to be documented on the final invoice. Historically, when reviewing invoices with warranty repairs, or no charge repairs it’s found that the change in method of repairs is not documented on these invoices. The repairs have been performed but there is no documented customer authorization. Documenting 7 items of Additional Authorization (change in method of repairs) is required by law and it makes no difference if its customer pay, warranty or a no charge repair.

 

Example of How To Document Change in the Method of Repairs Additional Authorization:  8-14-19 at 11:25 a.m. Text, Susie XXXXX at 111-111-1111. Replace front brake pads and rotors, $400.00 + tax. Total estimate $490.00 + tax.

 

Recommendations Again: When contacting via text or email, notate “text” and the “phone number” or the “email address”. As stated in last month’s article, include tax in your estimate amount or a Plus Tax statement. 

 

With the newest Electronic Regulations text and email messages or any other electronic form of communication will need to contain the 7 items of additional authorization in the context of the communication with customer.  Normally most text or email messages will have a date and time stamp and discloses, who the customer is. If not, the facility needs to document it.  Additionally, the facility will need to address in their communication to the customer the “Reason”, “Additional Cost” and “Revised Total”.  Also, don’t forget to document the RO# for linkage to this repair transaction. The regulations require that text, email messages and other electronic communications be maintained for 3 years.  If the facility doesn’t scan their Repair Orders, a printed copy of the text, email messages and other electronic communications will need to be maintained in the facility’s files for that transaction.  BAR will allow electronic authorization communications to be saved on a server that can reproduce copies of the authorization communications between the facility and the customer.

 

Acknowledge Notice Statement:  By law, a facility can use the Acknowledge Notice Statement in lieu of documenting the 7 items of Additional Authorization on the final invoice. When using the Acknowledge Notice Statement, the statement must be used as stated by law with the exact wording and the customer’s signature or initials. This is how it must be shown on the invoice:

 

"I acknowledge notice and oral approval of an increase in the original estimate price".

 

                                                                                                                __________________________                                                                              (Signature or Initials)

 

 

There is a problem I want to make you aware of when using the Acknowledge Notice Statement in lieu of documenting the 7 items of Additional Authorization on the final invoice. What if the customer refuses to sign or initial the statement, what do you have? No proof on the final invoice that the customer authorized any type of additional repairs. With the BAR, that’s called “Unauthorized Repairs” which means by law the facility is not allowed to do the repairs and/or charge for the repairs. I know of Professional Consumers that have refused to sign the notice on purpose. Afterwards, they simultaneously file a Complaint with the BAR and sue the facility and win their money back in court. Yes, with the BAR, I found out quickly that there are Professional Consumers that will take advantage of repair facilities.

 

I recommend using both the 7 items of Additional Authorization documentation and the Acknowledge Notice Statement on the invoice. If the customer refuses to sign or initial the Acknowledge Notice Statement, the facility still has the 7 items of Additional Authorization documented as required by law.  An additional reason to use both on the final invoice is due to Professional Consumers. A true story: A Professional Consumer filed a complaint with the BAR and “somehow” the consumer’s provided copy of the invoice did not show a signature for the Acknowledge Notice Statement but looked funny as if a signature might have been removed. The consumer alleged that the 7 items of Additional Authorization notated on the invoice was a “he said she said lie” and they wanted their $1000.00 back. The consumer went on to say they never authorized any additional repairs and the facility held their vehicle ransom for $1000.00 which was paid to get the vehicle back.  BAR inspection found that the repairs had been performed and the facility’s invoice did show that the consumer had signed the Acknowledge Notice Statement and the signature matched the consumer’s signature on the complaint form. We had to tell this Professional Consumer that the BAR could not prove their allegations and the facility had the right to Subpoena BAR’s complaint findings if the consumer was to take the facility to court. Using only the 7 items of Additional Authorization or the Acknowledge Notice Statement, by themselves and not together, can cause a facility problems with Professional Consumers.  That is why I say, cover your facility’s assets and always use both.

 

Acknowledge Notice Statement Tip: “Only” have the customer sign the Acknowledge Notice Statement when there is documented Additional Authorization on the invoice.  A large majority of invoices reviewed show where facilities always have the customer sign the Acknowledge Notice Statement. The problem is the only work performed, as per the original estimate and invoice, was performed. There were no additional repairs performed and there was no additional authorization for any additional services or repairs. With BAR, the signature in this case would be considered “Untrue and Misleading”. 

 

Unusual Designation of Authority: On occasions when contacting a customer about additional repairs, the customer wants the facility to contact someone else to provide the facility authorization for the additional needed repairs.

 

Example of How to Document Unusual Designation of Authority:

 

  • 8-14-19 at 11:25 a.m. Contacted Susie XXXXX at 111-111-1111. Stated contact Billy ZZZZZ (Boyfriend) at 111-111-3333 to receive brake repair authorization.

 

  • 8-14-19 at 11:35 a.m. Spoke to Billy ZZZZZ at 111-111-3333. Replace front brake pads and rotors, $400.00 + tax. Total estimate $490.00 + tax.

 

Finally: Per law, if a facility’s original estimate (including Unusual Circumstances) is not done correctly or the documented Additional Authorization is not done correctly, it’s a violation and the facility cannot collect for or perform the repairs. Auto industry attorneys believe the best form of Additional Authorization communication is electronic versus oral. Electronic communication normally provides better customer clarity and the best proof. Keep in mind it also provides very good proof to the BAR when a facility doesn’t document Additional Authorization correctly.

 

As we have said in the past articles published, in many cases customers complain either because their vehicle wasn’t serviced or repaired to their satisfaction or they didn’t understand what happened or it didn’t fix the problem. This month’s installment article for Unusual Circumstances and Additional Authorization was not designed for how to communicate properly with your customer. It was designed to show you the “Ins and Outs” to cover your facility’s assets when dealing with Unusual Circumstances, Additional Authorization and possibly a Professional Consumer or two.

 

Stay tuned for our next month’s installment on Invoices.

 

-Jerry

 

Jerry Froehlich

JBS  “Advisement for Automotive Repair and BAR Issues”

Email: Jerryjbs50@gmail.com

Phone 909-649-5599

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Oct 17th

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Johan Gallo

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Tuesday, October 1, 2019







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