I don’t trust anyone anymore.

Everything seems to be either poisonous or falling apart. And I’m not talking only about products made in China, although let me complain briefly about them: On behalf of my four train-owning grandchildren, I have returned 19 Thomas the Train engines because of lead in the paint. Nothing ruins a play date more than a toxic toy.

As a resident of Washington, D.C., I have received water bills warning me not to drink the water. (If certain politicians came with similar warnings, we’d be better off.) When the water bill arrived saying it was safe to drink again, I had to wonder how recent the information was as well as how accurate it was.

The news on the national scene doesn’t give me confidence either:

Six miners in Utah go off to work one day and never come home.

A bridge collapses in Minneapolis (after repeated warnings about how unsafe it was).

The air at Ground Zero during the cleanup after September 11 was toxic after all. And the United States government knew it at the time.

And don’t get me started on the Iraqi war or the “reasons” (i.e., lies) the United States began it in the first place.

For the most part, Americans trust their insurance companies. But should they? And should owners of body shops?

Take Allstate’s recent decision to turn over background checks of its PRO shops to an outside company. Why should collision repairers believe their information will remain confidential, especially given the traditional animosity between repairers and insurers?

Am I paranoid? If so, I’m not alone.

“The [Allstate] form is becoming more and more intrusive,” said a East Coast shop owner. While the shop owner doesn’t mind complying with some guidelines, including providing proof of insurance, she balks at some of what she sees as the more invasive requirements. “To demand that I or my shop foreman fork over $50 to run a background check on him—it bothers me as an employer that one should be allowed to do that.”

Says the shop owner: “If they want information from me, I have every right to ask information from them.”

The outside company providing background checks for Allstate, Acxiom Information Security Services, requires the shop owner to sign a document freeing Acxiom from responsibility in “any and all claims, losses, and damages arising out of liability or failure of the Vendor to keep and perform any of its obligations as mandated by the Fair Credit Reporting Act/state employment laws and all other pertinent laws.”

In signing, the shop owner also frees Allstate from responsibility.

Acxiom requires shops to file information over the Internet. When the East Coast shop owner asked if she could fill out the forms manually and mail them in with a check, she was told no.

I cannot help but be suspicious of what will be done with that information. Trust an insurer or its hired partner to keep information safe? Go ahead—drink that water. But if you wind up with a stomach ache, you’ll know why.

Liberty Mutual, another giant insurer, is demanding to see invoices of repairers’ purchases for parts. Some shops are refusing to show any invoices at all. Some show invoices but only reveal list prices. Some show whatever the insurer wants. Liberty Mutual clearly doesn’t trust repairers.

So why should repairers trust Liberty Mutual?

Here’s a new item from State Farm, the U.S.’s largest automotive insurer. State Farm is a bank, too, thanks to laws that permit insurers to become financial juggernauts. USAA, Allstate, and State Farm all have banks.

USAA has had credit cards for a number of years, but State Farm’s credit card offers something different: Charge the parts on it, pay the bill when it comes in (or pay installments), and receive a 1% credit on the next bill on the amount paid.

A repairer who tested the credit card called it a win-win-win situation. On the first month’s parts order, he has a month lead time, before he must pay the credit card bill. In the meantime, he can use the money as he sees fit. For example, if the repairer has a $100,000 loan in which he is paying eight percent interest and has charged $100,000 in parts that first month, he can use the money to pay off the loan. “If you discipline yourself…pay down your debt…you could save eight percent on that $100,000. That is the greatest value,” he said.

At some of the parts departments where he had negotiated a deep discount, the parts manager wanted to renegotiate their deal, as the parts department has to pay a service charge in order to accept credit cards. In some cases, the repairer said, he and the parts manager compromised. It was still worth it to the repairer to have use of the money until he paid the bill a month later. He is also using the State Farm credit card to buy his paint.

State Farm’s bank wins as it collects the service fee from the merchant who accepts the credit card.

Especially in tough times, some repairers are slow or even delinquent in paying bills to parts departments. If the parts department is paid with a credit card, it won’t face this problem. The repairer can pay the bill on time on his credit card. In this respect, it’s a “win” for the parts department.

But wait: If body shops are using State Farm credit cards, the insurer will have a detailed report on the shops’ purchasing habits.

Raise your hand if you think State Farm will do nothing with this information.

Now raise your hand if you think it will use it to its advantage (at the expense of shops, if necessary).

Trust insurers?

I’d sooner drink a glass of D.C. tap water.

© 2007 Sheila’s Information Network Inc.

Sheila Loftus (sheilaloftus@yahoo.com), past publisher of the CRASH Network, has written about the auto collision repair industry for 32 years. She lives in Washington, D.C.