Indiana Code
Chapter 13. Unfair Practices
9-32-13-17. Payment or Disapproval of Dealer Claims; Basis of Disapproval; Notice of Disapproval; Appeals, Audits, and Chargebacks

Sec. 17. (a) It is an unfair practice for a manufacturer or distributor to:
(1) fail to pay a claim made by a dealer for compensation for:
(A) delivery and preparation work;
(B) warranty work; and
(C) incentive payments;
not later than thirty (30) days after the claim is approved;
(2) fail to approve or disapprove a claim not later than thirty (30) days after receipt of the claim; or
(3) disapprove a claim without notice to the dealer in writing of the grounds for disapproval.
(b) A manufacturer or distributor may:
(1) audit a claim made by a dealer; or
(2) charge back to a dealer any amounts paid on a:
(A) false or fraudulent claim;
(B) claim in which repairs were not properly made;
(C) claim involving work that was not necessary to correct a defective condition; or
(D) claim that the dealer failed to substantiate in accordance with the manufacturer's written procedures or other reasonable means;
for up to twelve (12) months after the date on which the claim is paid. However, the limitations of this subsection do not apply if the manufacturer or distributor can prove fraud on a claim. A manufacturer or distributor shall not discriminate among dealers with regard to auditing or charging back claims.
(c) Except as provided in subsection (d), a manufacturer or distributor may not deny a claim based solely on a motor vehicle dealer's incidental failure to comply with a specific claim processing requirement, including a clerical error or other administrative technicality that does not call into question the legitimacy of a claim when the dealer has provided reasonably sufficient documentation of the dealer's good faith attempt to perform necessary work in compliance with the written policies and procedures of the manufacturer.
(d) A manufacturer or distributor shall provide a dealer with written notification of the specific grounds upon which a claim is being charged back as a result of an audit. A manufacturer or distributor shall provide a reasonable appeals process allowing the dealer at least thirty (30) days after receipt of the notice of charge back to provide additional supporting documentation or information rebutting the charge back. If the charge back is based upon noncompliance with documentation requirements, material claim submission requirements, or other material clerical errors, the manufacturer or distributor shall allow the dealer thirty (30) days from the receipt of the notice of charge back to cure any material noncompliance. A manufacturer's or distributor's audit or appeals process shall allow a dealer, the dealer's designated agent, officer, or employee to request, in writing, a meeting with the manufacturer or distributor via in-person meeting, video conference, or telephone call or a written explanation of the basis for a charge back. The manufacturer or distributor shall respond with all details and specific information supporting the basis for each charge back. The manufacturer or distributor and the dealer may agree, during the audit or appeals process, to an extension of time for the dealer to cure any material noncompliance as necessitated by the volume of the claim charge backs at issue.
(e) A motor vehicle dealer may submit an amended or supplemental claim within the time and manner required by the manufacturer for:
(1) sales incentives;
(2) service incentives;
(3) rebates; or
(4) other forms of incentive compensation;
for up to sixty (60) days from the date on which such a claim was submitted, could have been submitted, or was charged back. For purposes of this section, a failure to obtain a required signature may not be considered to be a clerical error or administrative technicality.
As added by P.L.92-2013, SEC.78. Amended by P.L.167-2016, SEC.3; P.L.112-2018, SEC.3.