The largest used car/car repair chain in Japan collapsed last month over fraud. And not just fraud, but an amazing panoply of varigated fraud.
After the founder hired his son to run things (big red flag), Bigmotor started earning record profits and rapidly expanded across Japan. Turns out the growth came not only through fraud, but particularly naked and egregious fraud.
They would damage customers tires, and then tell them they needed four new ones. And a trainee captured fraud instructions on video. They even had quotas for how much they had to git out of everyone who came in for a repair.
But why just rip off customers when you can also ripoff the insurance company? “When the customer had insurance, Big Motor always milked the job for as much as they could. They knew the most expensive things to damage to jack up the bill.” They made damage worse, used tricks to make claim photos look worse, and even bashed car panels with socks full of golf balls.
Alerted to the fraud, they let Bigmotor investigate themselves.
Another reason insurance companies didn’t rock the boat: Bigmotor was once of the biggest sellers of car insurance in Japan. And Sompo Japan, one of the big three, was one of the biggest stockholders in Bigmotor.
Everywhere a tree along a public road blocked a Bigmotor sign, they poisoned the tree.
They also treated their employees like shit, setting impossible quotas and threatening to fire employees who didn’t buy a used car.
All of it finally caught up with them. “61 workers, or nearly 60% of 104 surveyed employees, said they had been ordered by their supervisors to pad car repair charges to receive bigger insurance payouts…Bigmotor has so far found 1,275 cases of such fraudulent practices and that ¥6.62 million in insurance benefits for 177 of the cases have been repaid, the company said.” The heads at Bigmotor (and his crooked son) resigned, and the head of Sompo Japan stepped down as well.
It used to be that this sort of institutional corporate fraud was all but unthinkable in Japan. But recently several high profile fraud cases have hit companies like Olympus, Nissan and Kobe Steel.
Still, those involved various accounting shenanigans rather gross fraud against customers. I would expect some prison sentences at Bigmotor are in order…