Japan's transport ministry said Friday it plans to order major used car dealer Bigmotor Co. to halt operations of one-fourth of its vehicle maintenance outlets over suspected improper provision of services as investigations continue into insurance fraud cases.
The Ministry of Land, Infrastructure, Transport and Tourism inspected 34 locations in July based on a report by outside lawyers that said the company intentionally damaged vehicles to inflate repair fees, and confirmed legal violations at all of the outlets.
The violations included charging excessive repair fees, skipping car inspection items and doctoring a logbook, according to the ministry.
The 34 shops located in 24 prefectures will face an operation suspension for a period of between 10 and 90 days. Twelve of them will have their authority to conduct safety inspections revoked, the harshest penalty that can be imposed against private automobile inspection stations.
The remaining 101 vehicle maintenance shops are still under scrutiny, leaving open the possibility of more outlets being subject to administrative penalties.
The punitive steps against the 34 locations are expected to be finalized after the ministry's regional bureaus conduct hearings with Bigmotor on Oct. 20.
The road transport vehicle law prohibits companies from charging for repairs not requested by customers or not carried out.
Separately, the Financial Services Agency has been searching offices of Bigmotor and casualty insurer Sompo Japan Insurance Inc. to check their relationship after the dealer was found to have charged excessive repair fees and lodged fraudulent insurance claims.
A report by the outside lawyers has found instances where employees damaged vehicle bodies with screwdrivers and golf balls or falsely claimed to have done paint work.
In a further blow to Bigmotor, police have also been investigating the company on suspicion of property destruction after roadside trees near its dealership outlets were found to have withered unnaturally.
Speculation has swirled that the company was intentionally damaging trees near its stores so that the cars on display were more visible to passersby.
