Jerry Brown Throws Down: Midas Auto Shop Franchisee Spanked Hard for Bait and Switch

California Attorney General Jerry Brown can’t abide car repair shop owners who rip you off for unnecessary work. News comes this morning about a judge in Alameda County who signed off on a: 

$1.8 million settlement that prevents Maurice Irving Glad (aka Mike Glad), owner of 22 Midas auto shops throughout California, from owning or operating an auto repair shop in the state, after the franchisee “deceptively lured” customers with cheap brake specials and then charged hundreds of dollars for unnecessary repairs.”

Now what do you suppose Mike did with some of that ill-gotten booty? Well, he traveled the world, natch, but he also produced an Academy Award-nominated documentary (narrated by Edward James Olmos!) called Recycled Life. (So all those people in the East Bay and the South Bay who thought they were just fixing their cars actually were financing the Hollywood dream factory by paying an average of $268 more than they should have….)

Anyway, get the deets below to see how our California Bureau of Automotive Repair does sting operations. And get the other side of the story from Mike’s mouthpiece via Henry K. Lee right here.

El Protector De La Gente, Jerry Brown:

Read all about it, after the jump

Brown Reaches $1.8 Million Settlement with Owner of 22 Midas Auto Shops Over Massive Bait-and-Switch Scheme

Oakland – Attorney General Edmund G. Brown Jr. today announced a $1.8 million settlement preventing Maurice Irving Glad, owner of 22 Midas auto shops throughout California, from owning or operating an auto repair shop in the state, after the franchisee “deceptively lured” customers with cheap brake specials and then charged hundreds of dollars for unnecessary repairs.

As part of the settlement, Midas International Corporation is acquiring all of Glad’s shops, which therefore will continue to operate without interruption.

“For years, Glad ran a bait-and-switch scam, in which he deceptively lured customers into his Midas shops with cheap brake specials, then charged them hundreds of dollars more for unnecessary repairs,” Brown said. “Our settlement makes sure that Glad will never own or operate an auto repair shop in California again.”

After a four-year undercover investigation by the California Bureau of Automotive Repair, Brown filed suit against Glad in June 2009. The investigation revealed that Glad regularly advertised $79 to $99 brake specials at his Midas shops to draw in customers and then often charged another $110 to $130 for unnecessary brake-rotor resurfacing. In some cases, customers were charged hundreds of dollars more for repairs that were not needed or never performed.

The settlement requires Glad to pay $1.8 million in damages, investigative costs and attorney fees, plus permanently prevents the franchisee from:

- Applying for or holding any license or registration issued by the California Bureau of Automotive Repair or any successor agency; and
- Engaging in any business that requires any type of license or registration issued by the California Bureau of Automotive Repair or any successor agency.

In addition to acquiring Glad’s 22 shops, Midas International Corporation has agreed to honor any and all guarantees or warranties previously made or given to customers.

In 1989, the state attorney general sued Glad for similar violations, which resulted in an injunction prohibiting his shops from performing unnecessary repairs, charging for services not performed, or using scare tactics to convince customers to purchase unnecessary parts and services. The California Bureau of Automotive Repair initiated its recent investigation into Glad’s Midas shops to monitor compliance with the injunction.

Undercover agents, posing as customers, conducted approximately 30 sting operations at Glad’s shops. In total, there were more than 35 incidents, involving 105 violations, in which shop managers, mechanics and employees made false or misleading statements to pressure customers into purchasing unnecessary parts and services. On average, the shops charged undercover agents almost $300 in unnecessary brake-rotor resurfacings, brake-drum repairs, brake adjustments, brake-cleaning services and other services.

“Overselling of services has become an increasing problem,” said California Bureau of Automotive Repair Chief Sherry Mehl. “It amounts to fraud and seriously harms the consumer. That’s why we aggressively work to find and shut down these shops.”

Brown’s lawsuit was filed jointly with Alameda County District Attorney Tom Orloff (then) and Fresno County District Attorney Elizabeth A. Egan, due to the large number of shops operating in Alameda and Fresno Counties. Glad’s 22 Midas shops are located in Campbell, Clovis, Concord, Dublin, Fremont, Fresno, Hayward, Manteca, Merced, Modesto, San Jose, San Leandro, Turlock and Walnut Creek.

Brown’s lawsuit contended that Glad and his shops:

- Used false and misleading advertising in violation of Business and Professions Code 17500;
- Employed unlawful, unfair and fraudulent business practices in violation of Business and Professions Code 17200; and
- Disobeyed the 1989 Alameda County Superior Court injunction in violation of Business and Professions Code 17535.5 and 17207.

“The Department of Consumer Affairs has zero tolerance for consumer fraud,” said California Department of Consumer Affairs Director Brian Stiger. “We are very pleased that, in partnership with the Attorney General’s office, we have been able to stop a bad player from further harming both consumers and the hard-working, law-abiding players in the auto repair industry.”

Consumers who believe they have been overcharged by an auto-repair facility can file a complaint with the California Department of Consumer Affairs, Bureau of Automotive Repair online at: www.autorepair.ca.gov or by calling 1-800-952-5210.

You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://ag.ca.gov/newsalerts/release.php?id=1850

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