Investigation: A Total Loss

Edward Singleton knows what keeps vehicles running. He's got plenty of them to work on throughout his property that is surrounded by farmland in rural Sumter County.

One of those vehicles used to be a 1996 Chrysler Sebring he purchased for his son a few years ago for $6,900. But soon, this Sumter man poured much more money into the vehicle for repairs.

"We had to have the transmission done, which cost us about $1, 400," said Singleton. He initially thought the costly repairs were due to bad luck; but in 2005 he received letters in the mail from State Farm Insurance and the SC attorney general's office. The letters stated that the Sebring purchased with a clean title should have had a salvage title, which would make the car a total loss.

"Had I known that, I would not have bought the car. Maybe some of these problems are a result of the fact that it was salvaged," said Singleton.

State Farm offered to pay Singleton $1000 for the mistake. He's not the only one with this problem. In fact, more than 1,100 similar letters were sent to other South Carolinians. The list of vehicles was made public for the first time after News Channel 7 fought for months to get the information from the state attorney general's office.

The letters were the result of a multi-state settlement agreement between 49 states and State Farm Insurance worth $40 million dollars. State Farm approached the attorney general after an internal audit was unable to confirm that the company had properly titled at least 30,000 vehicles nationwide.

South Carolina considers a vehicle a total loss when it has lost 75 percent of its value from an accident, a flood, or excessive mileage. Automotive experts say it's unsafe to drive a vehicle if you are unaware that it has been deemed a total loss.
  Click here to search our database of S.C. vehicles.

"I imagine the worst-case scenario would be safety. Anything controlling the brakes, suspension, steering, that type of stuff, would be real bad," says Robbie Kinion, a Spartanburg Community College automotive instructor.

But safety is just one issue.

"The first problem is that you overpaid for that vehicle," says Steve Moskos, a consumer attorney in Charleston.

He says consumers got a bad deal from the settlement. Moskos is trying to get a class action lawsuit approved in federal court so that he can take State Farm to trial, "If a vehicle has been damaged, it is going to be worth less in the marketplace than one that's undamaged."

Only one state, Indiana, chose not to take part in the multi-state settlement. After a two year investigation in Indiana, State Farm repurchased 305 vehicles for the book value of the original purchase, the cost of repairs and finance charges.

Total compensation from Indiana's settlement was $4.3 million. S.C. consumers were compensated about half that amount for nearly 200 more vehicles.

South Carolina Attorney General Henry McMaster says consumers got a good deal here, "I think so because there are two ways to handle it. Either the consumers could have sued on their own," or agreed to the settlement that State Farm considered a fair re-compensation.

Conflict of Interest?

The attorney who represented State Farm Insurance during the settlement was Bart Daniel, a close friend of McMaster. In the photo on the right, Bart Daniel is the man on the left with an unidentified man on the right.

"Yes, very good friends," McMaster said when asked about him.

McMaster hired Daniel when they both worked at the U.S. Attorney's office years ago. McMaster says Daniel's friendship did not have any impact on the settlement," No, of course not." Over the phone, Daniel agreed with McMaster.

It's against the law to knowingly sell a miss-titled vehicle in South Carolina, but State Farm never saw criminal charges. The insurance company declined an on-camera interview.

About 500 South Carolinians did not take part in the settlement agreement. However, it's too late to do so if you find out that you were owed money.

McMaster recommends trying to contact State Farm to request your money, or find an attorney willing to take your case.