A.G. Brown files lawsuit against Midas

June 30, 2009 8:29:10 PM PDT
State Attorney General Jerry Brown filed a lawsuit in Alameda County Superior Court today against 22 Northern California Midas auto shops, including 13 in the Bay Area, that allegedly used a "massive bait and switch scam" to lure customers.

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The suit, seeking $222 million in civil penalties, costs and reimbursements to customers, was filed following 30 undercover sting operations over four years at 22 locations across Northern California, including Campbell, Concord, Dublin, Fremont, Hayward, San Jose, San Leandro and Walnut Creek.

"This is a classic bait and switch scam that lured customers and charged them hundreds more for services that they didn't need," said Scott Gerber, a spokesman with the attorney general's office.

The investigation was conducted by the California Bureau of Automotive Repair. It allegedly revealed a scheme in which Maurice Irving Glad's 22 Midas franchise shops, one of the world's largest providers of automotive services, advertised $79 to $99 brake specials to attract customers and then added on an additional $110 to $130 fee for unnecessary brake rotor resurfacing services, and hundreds of dollars more for repairs that were unnecessary or never performed, according to the attorney general's office.

Undercover agents posing as customers reported witnessing on several occasions shop managers, mechanics and employees making false or misleading statements to pressure customers to purchase unnecessary parts and services, according to the attorney general's office.

In 1989 the Alameda County Superior Court issued an injunction prohibiting Glad's shops from performing unnecessary repairs, charging for services not performed, or using scare tactics to convince customers to purchase unnecessary parts and services, the attorney general's office claimed.

Glad's attorney William Gagen issued a statement today saying his client would aggressively defend against the complaint.

"Midas franchisee Mike Glad and his 22 shops in Northern California are victims of an inconsistent and destructive enforcement process undertaken by the Bureau of Automotive Repair to take advantage of hard working mechanics in repair shops," Gagen said.

Bob Troyer, a spokesman for Midas Inc. said today that Glad, who has been a franchisee for more than 30 years, "has always been strongly committed to the training of his employees."

Troyer said the corporation has worked with Glad to reinforce employee training, however, as a franchiser, it does not control the day-to-day operations of individual franchise owners apart from monitoring them through an internal consumer affairs department if there are issues. In Glad's case, Troyer claimed, the operation did not reveal any patterns of consumer complaints or issues.

Brown's lawsuit was filed jointly with Alameda County District Attorney Tom Orloff and Fresno County District Attorney Elizabeth Egan and also seeks an injunction prohibiting the shops from coercing its customers into buying unnecessary motor vehicle repairs or services, making or authorizing false and misleading statements and obtaining payment for repairs or services that were not performed or for retail products that were not provided.

Anyone who may have been ripped off by an auto repair facility can file a complaint with the Bureau of Automotive Repair at the California Department of Consumer Affairs at (800) 952-5210.

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