One Guard Inspections

By Jill Trotta

Mechanical repair fraud is a rising, expensive problem for third-party administrators (TPAs), draining an estimated 2.6 billion from the industry every year. But it doesn’t have to.

As fraud tactics become more sophisticated, forward-thinking TPAs are turning to smarter, more proactive inspection tools to prevent inflated claims before the payout, and they’re seeing measurable results.

The Cost of Doing Nothing

Warranty fraud now accounts for up to 10% of total warranty expenses. In 2023 alone, U.S. companies reported $26.1 billion in warranty costs, which means a potential $2.6 billion lost to unnecessary or fraudulent repairs.

For individual TPAs, this can quietly erode 1-4% of annual revenue – money that should be going toward real claims, customer service, and future growth. And with the TPA market projected to reach $680B by 2023, that loss will only scale.

Why It’s Getting Worse

Three key trends are making TPAs more vulnerable:

Repair costs jumped 20% in 2023—making overcharges harder to spot.

58% of Americans can’t afford surprise repairs, increasing the incentive to push claims.

Vehicle complexity makes it easier to hide fraudulent or padded diagnostics behind technical jargon.

The result: legitimate claims often become gateways to inflated repairs, and TPAs pay the price.

Common Fraud Patterns Slipping Past Traditional Detection

Based on thousands of inspections, we consistently see three patterns that lead to major overpayments:

1. The “Discovery” Overcharge

A small repair is exaggerated during extended shop time.
What starts as an $800 alternator replacement turns into a $3,200 bill for “related electrical damage” discovered while the vehicle “awaits authorization.”

2. Post-Sale Failures, Manufactured on Purpose

Coverage is purchased with full intent to trigger a failure once the waiting period expires, often through mechanical abuse.
A suspiciously high volume of claims occur just after the 30-day mark.

3. The Diagnostic Cascade

During the 2–3 hours it takes to process a claim, unethical shops document unrelated failures.
A $400 misfire claim balloons to $2,800 once the shop adds fuel injector issues, carbon cleaning, and coil replacements.

Why Existing Safeguards Aren’t Enough

Networks like RepairPal help vet repair facilities, but they can't verify what actually needs to be repaired.

Traditional virtual inspections (i.e., photo submissions from the shop) leave too much room for manipulation:

Photos can be selective or staged

Static images miss smells, sounds, or wear patterns

The shop has financial incentive to justify larger repairs

The Smarter Solution: Independent, Real-Time Inspection

That’s where One Guard Inspections comes in.

We’ve built a nationwide network of ASE-certified inspectors who deliver real-time, unbiased inspections, both in-person and virtual. This is the missing link for TPAs who want to get ahead of fraud without slowing down claims.

Virtual Doesn’t Mean Vulnerable

Not all virtual inspections are created equal. Our Priority Inspections offer:

Continuous, unedited video with VIN capture - no pausing, no switching devices

Real-time remote oversight by an ASE-certified inspector

Inspector-guided assessments with live questions and step-by-step verification

Third-party documentation, not shop-submitted content

Multi-layer QA review with fraud flagging and escalation protocols

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When It Really Matters: In-Person, Independent Inspection

For high-value claims, nothing beats a trained inspector on-site.

We provide:

Objective, third-party verification before repair

Detection of subtle tampering or pre-existing damage

Full condition documentation, eliminating guesswork and disputes

Faster approvals for legitimate claims

The ROI of Fraud Prevention

It’s simple math:

Average fraud loss = 1–10% of TPA revenue

Cost of inspection = a fraction of a single inflated claim

Net impact = faster, more confident claim decisions

Competitive Advantage, Not Just Cost Avoidance

Fraud prevention isn’t just risk management; it’s a strategic edge. TPAs that reduce fraud rates can:

Offer more competitive pricing

Build stronger shop relationships

Reduce customer disputes

Invest in service rather than absorbing losses

Let’s Keep Fraud from Winning

At One Guard Inspections, we believe TPAs deserve tools that protect profits and strengthen the customer experience. With both Priority (virtual) and in-person options, we’re helping TPAs verify claims, prevent overcharges, and stay ahead of fraud.

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If you’re ready to get started or have any questions, we’d love to hear from you!

Get in touch here: https://www.oneguardinspections.com/contact-us