Scratch and dent repair membership

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This was one of those extras a car dealer sold me on. $1600 for a 5-year membership of a certain company providing repairs for paint scratches and dents. The selling points were that they’d repair anything of a minor nature so I wouldn’t need to make an insurance claim and lose my no-claim bonus etc. It sounded good so I swallowed it, and the price gets added to my delivery bill.

6 months later I have a scrape on a pillar backing into a tight parking space. I take the photos and lodge an online claim for the repairs. That’s when I learn how much fine print there is. The list of what they won’t cover is longer than what they will. Their decision is final and no explanations are given. So I’m told my damage doesn’t fit the criteria, therefore cover is refused.

Might I have any recourse on the grounds that the dealer who sold me the product, signed me up for it, and took my money, didn’t tell me about all the exclusions in the fineprint? I’d like to ask for refund.

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Welcome @eN0ch to the Choice Community.

Please provide the name of this repair insurance scheme. Sounds like a variation of the usually worthless extended warranty schemes. Only even more useless.

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Which company? The terms and conditions for any kind of insurance are key information.

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Superb Scratch n’ Dent mysuperb.com.au
Car dealer was Noble Toyota in Chullora

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So let’s see if I understand this.

You pay for five years membership to a repairer, who then decides on the basis of a claim process whether or not at their total discretion based on a photo to take on the job of fixing a minor dent or scrape. If they do agree to take on the job, they will give you a quote on the cost, and you pay for the repair.

So what is the point of membership? Sounds like paying money for absolutely nothing.

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Their rules look like they exclude anything but the most superficial marks. I don’t see how you can get anywhere with this but wiser heads may know a way.

According to their T & Cs you can exit and get a partial refund for time left in your membership period if you want to get out but you may not get much.

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I cannot assist with the presentation of what you were sold since I was not there, but as a general statement ANYTHING a vehicle dealer tries to sell one above the vehicle itself is called ‘a dealer pack’. It mainly ‘packs their profit’ and very few of the products are worth more than a few $10s of dollars and sold for $100’s and $1,000’s.

It appears the summary of what is covered says it all. You paid your membership and agreed to pay another $49.95 for each instance of the following:

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Scratches and scrapes are easy. A pressure dent is one that will pop out if pushed from behind or suctioned from the front, again easy. From experience over the past few years the most expensive of those repairs using a one off travelling scratch and leather repair tech would be in the order of $150-250 for one area not for each scratch. A complex touchup of scratches and dings covering one door, the front bumper, and front wing was $750; a panel shop wanted north of $2,000! The travelling tech did very good work, too.

So you didn’t read what you bought? Unless you can successfully claim it was an unconscionable contract probably not. Could you make that claim? Perhaps on

when it would be reasonable and expected to have documentation regarding why a refusal has been made. Would that be enough to be unconscionable? Probably not but nothing ventured.

My opinion is you have ‘invested’ $1600 in an educational experience. Superb Scratch n’ Dent is pretty up front about what they are regarding cover and so on as presented on their website and have a ‘customer acknowledgement form’ you probably signed. Would the brochure be any different?

However, from their T&C, note

You have the right to cancel Membership if:
…
or (ii) at any other time, you notify us, in which case we will provide you with a pro-rata
refund of the unused portion of the Fee (Unused Fee) less the greater of $250 or
50% of the Unused Fee. The unused portion will be calculated on a daily pro-rata
basis

to be paid through the dealer. My take (check my math) is you are entitled to
365 days * 5 years = 1825 days in the plan. (The pro-rata is computed on days.)
6 mos in (taken as 180 days) yields 180/1825 = 10.14% ‘earned’ so 89.86% potentially refunded
89.86% * $1600 = $1437.76 BUT they take 50% of the unused fee or $250 whichever is greater, so you might get ~$718.88.

Please let us know how you go with this and I trust you are more resistant to those deals one is offered between agreeing to purchase a vehicle and getting out the door with that vehicle.

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Thanks Phil. Your analysis makes good sense. Maybe it is indeed down to a costly educational experience.

The dealer gave me verbal-only (over the phone) information about the scratch and dent service. There was no documentation provided to me about it. It was just added to the bill as a line item, after I’d verbally said ‘yes’ to it. There was nothing in the verbal sales pitch about the possibility of cover being refused, nor of needing to pay anything extra for actual repairs.

In fact from the conversation I took it to be a service provided (or backed) by the dealer. There was nothing anywhere that told me I was getting a membership of a 3rd-party scheme. I wasn’t given any T&C document, and to the best of my recollection I didn’t sign any separate document about it; only the documents for purchase of the car.

I only found out what I’d actually paid for through an email from the company, with my membership details, a few days after buying the car.

Going on your advice about membership cancellation, I guess I might go that route, and in the process at least try requesting documentation detailing reason for refusal. (Although on my reading of what they give me, I rather suspect such a request would be classed as a dispute?)

Yes, I will report back.

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Based on what you say that you did not know what you were signing and did not get t&c, I’d go back to the dealer and ask for a refund. When you enter into a contract you need to be told and understand what you are signing for.
Scare them by saying you’ll go to fair trading.
I’m guessing thst the cost is not in the thousands, so going down any legal route is going to exceed the cost of what you are claiming.

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Hi guys,

I promised to get back with an update on how I went. So here it is. I emailed the company (not the dealer). I started with:

Having noted in the Terms and Conditions that your decision is absolute and final, I’m guessing that I can’t expect a more detailed explanation or documentation providing reasons for the refusal of these repairs. But I’m going to ask anyway. So please can I be informed of the actual reasons for this.

As expected that was met with silence. So I guess that’s my answer.

Anyway I did have more success with the next bit:

Beyond that, I’d like to cancel my membership forthwith, and request the refund to which I’m entitled under clause 3 (b) (ii) of the Terms and Conditions. I also request clarification of clause 3 (d). Do I need to request this refund from the dealer, or can I take it that you will arrange the refund through the dealer?

They replied (excerpt):

We have acknowledged your wish to go through with a refund of your Membership. Superb Scratch 'N Dent is responsible for processing refunds so there won’t be a need to go to your Dealership.

Now as the membership has been used: 7 months. The refund will be calculated on a Pro-Rata basis, this total calculates out to be: $726.32.

If you wish to proceed with this refund, we will require banking details to process and transfer the calculated amount into your account.

I replied briefly with a ‘Yes’ and the bank details (encrypted!). And I can confirm that I duly received the agreed sum refund. So in the overall scheme, I guess that’s an ok escape. It’s slightly below half the $1600 I paid for the membership.

That’s kinda’ the end I guess. Although I think I will chase up the dealer as well, at least to tell them the ‘membership’ borders on being a scam and I wouldn’t recommend they continue offering it. I might chance my arm on kaindub’s suggestion too. :thinking:

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Thanks for closing your case @eN0ch. It was good you received at least the basic refund promptly and without hassle.

It does not reflect well on the dealer to offer shonky products, yet many of them do simply because it is highly profitable and the sales person usually gets a yes/no quickly with minimal dramas, and moves on either way. For unhappy buyers the companies honour their refund requests quickly if not always cheerfully so buyers get ‘the deal’ offered.

Unfortunately as you and probably many others discovered too late, these products are far from ‘deals’. Any time there is a cooling off period it is best to assure every T&C and product description is read carefully before it becomes too late, and never to buy anything sight unseen.