Stopping the epidemic of catalytic converter theft

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By Sally Greenberg, Chief Executive Officer, National Consumers League

For many years, I drove a 2007 Toyota Prius. I loved my little fuel-efficient and quiet machine, getting 45 mph and putting almost 189,000+ miles on it. All went well until one night a few years ago when—being an insomniac, I was up reading at 3 am—outside my window I heard what sounded like someone taking bolts off a tire, a loud buzzing or whirring sound. It lasted about 5 minutes. I thought some kindly father or uncle was putting air in a kid’s tire or changing a flat.

The next morning when I headed out for work, I started up my Prius, and to my shock, it sounded like a jet engine driving down the street! It dawned on me that the sound I heard last night was guys cutting the catalytic converter (CC) off my Prius! To borrow a phrase my mother used to say, I was mad as a wet hen!

 So I called my insurance company.

And, sure enough, they confirmed that 2005-2009 Priuses are a prime target because their CCs have precious metals that can be melted down and sold by unscrupulous actors. The CC is used to filter out harmful byproducts from the car’s exhaust, using precious metals like platinum, palladium, and rhodium to accomplish this. These metals can sell for hundreds to thousands of dollars per ounce.

While my auto insurer, State Farm, thankfully covered most of the replacement cost, I had to cancel going to work. I couldn’t drive the car so I had to have it towed to my garage seven miles away. I ended up paying for a shield to be placed on the CC to prevent it from happening in the future. In total, I was out of pocket $1,000 while the repair cost more than $3,500.

According to State Farm, the average cost of a repair comes in at around $2,900. As of October 2023, $41.7 million had been paid out to State Farm customers to repair and replace the part. In addition to the cost of replacement, customers report that repairs can take weeks to months, depending on the vehicle and due to a shortage of available replacement parts. Used vehicle lots are bearing a large brunt of this wholescale theft and insurance companies are also paying needless costs.

Ever since my catalytic converter incident, I’ve taken a closer look at this issue and learned that there is no legitimate use for a sawed-off CC because it cannot be used in another vehicle. The only thing it’s good for is its melted-down metals. Thus, the business model is illegal. In other words, there are bad guys on both sides—the theft rings and those who accept and pay for the scrap metal for melting down.

The good news is that in the first half of 2023, claims are down. There were around 14,500 claims filed then, compared to the 23,000 claims made during the same timeframe in 2022.

Carfax, however, issued a warning that the nation might be underestimating how widespread the problem is because many car owners don’t file insurance claims. Some drivers don’t have full coverage on older vehicles and some don’t have insurance at all.

That is why we welcome efforts by Congress to pass laws to deter catalytic converter theft. The bills introduced so far in the House and Senate include marking the part with a unique number and requiring the identity of those selling and buying the CC. NCL supports both!

H.R. 621, the PART Act,  was introduced by Reps. Jim Baird (R-Ind.), Betty McCollum (D-Minn.), Angie Craig (D-Minn.), Randy Feenstra (R-Iowa), and Michael Guest (R-Miss.). S. 154 was introduced by Sens. Amy Klobuchar (D-Minn.), Mike Braun (R-Ind.), Ron Wyden (D-Ore.), and J.D. Vance (R-Ohio).

We are working with the National Auto Dealers Association and 20 other organizations who all sent a letter to the leadership of the House and Senate Commerce Committees in support of the PART Act in May. NCL urges members to cosponsor H.R. 621/S. 154.

As for me, I replaced my 2007 Prius last summer with a new Prius Prime, whose CC is relatively worthless in terms of precious metals. I love my new car and am so relieved to know it won’t be a target for thieves in the night.

NCL looks forward to working with Congress to pass the PART Act, which will protect consumers and insurance companies from the hassle and expense of catalytic converter theft.

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Resources:

Issue Brief

Request to Cosponsor

Current Cosponsors

Coalition Letter to Commerce Committees

 

 

Not so fast, PBMs: You aren’t fooling consumers

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By Robin Strongin, Senior Director of Health Policy

A recent op-ed, “It’s Time for Facts in the PBM Debate” by the president of one of the nation’s largest pharmacy benefit managers (PBMs), is at odds with the reality of what consumers are facing when we go to the pharmacy.

In his commentary, David Joyner paints a rosy picture of how the largest PBMs lower drug prices. Meanwhile, consumers across the country are being hit with higher out-of-pocket costs and a lack of understanding about what goes into the costs for their medicines. This opaque system results in consumers running into several issues trying to access more affordable drug options.

The PBMs aren’t fooling anyone.

In Joyner’s own company, a whistleblower brought suit over the PBM’s scheme to keep lower-cost generics off its formularies for Medicare beneficiaries, pushing seniors to more expensive drugs (for which the PBM had negotiated higher profits for itself). The whistleblower said she was told by company executives that the financial benefits of this manipulation outweighed the possibility of getting caught.

More recently, community pharmacies in Iowa filed a lawsuit against CVS Health and its Caremark PBM claiming that they violated antitrust laws and illegally collected fees from pharmacies filling Medicare prescriptions. We’ve seen this behavior often force trusted, and long-established local pharmacies out of business.

What’s most concerning is that such questionable PBM behavior can have tragic results beyond pharmacy closures. In Wisconsin earlier this year, a young man with severe asthma died after he was informed at the pharmacy that his inhaler was no longer covered by insurance and he couldn’t afford the hefty out-of-pocket cost.

We can’t let this happen to another person. Consumers deserve more transparency. They deserve accountability in this middlemen PBM system. Most of all, we all deserve better than to be inundated with large PBM falsehoods.

Even as these mega-PBMs assure us that they are patient advocates, they are fighting tooth and nail in Congress and state legislatures to block measures that would take the necessary steps to ensure that consumers – and not the PBMs themselves – actually benefit.

Those are the facts in the big PBM debate.