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Auto Repair Secrets

Repair Scams
When undercover cars in California and New Jersey caught Sears Auto Centers selling unnecessary repairs in 1992, many people were surprised to learn that the company had quotas, sales commissions, and contests that encouraged the sale of additional repairs. Consumer advocates said those practices were responsible for the problems at Sears, but the company initially denied that anything improper had occurred. Sears claimed that replacing good parts before they fail was "a common practice in the industry" and tried to pass it off as preventive maintenance. The company later admitted that "mistakes did occur" and agreed to pay $8 million to settle the California charges. Sears also agreed to make restitution to 900,000 customers nationwide and they discontinued the use of quotas, commissions, and contests.

At the time, the shocking truth of Sears' words went largely unnoticed. But the industry's "dirty little secret" was out: Quotas, commissions and contests (for example, Caribbean cruises and $10,000 cash prizes for managers, $500 per day quotas for mechanics), plus the replacement of good parts, really were common practices at many large, well-known auto repair chains. A number of undercover investigations and class-action lawsuits have resulted in charges of deceptive advertising, bait & switch tactics, and outright fraud at some of the biggest names in the business.

Chain Stores Caught (Again) in KCBS Sting
May, 1999: Exactly one year after their ground-breaking auto repair investigation, KCBS-TV conducted more undercover runs at repair shops in the greater Los Angeles area. According to the KCBS I-Team, shops from Pep Boys, Goodyear, Tuneupmasters and Purrfect Auto recommended and/or sold repairs that were not necessary.

Chain Stores Caught in Undercover Investigation
May, 1998: A three-month hidden camera investigation by KCBS-TV in Los Angeles caught dozens of big-name chain stores recommending and/or performing unnecessary repairs. Undercover runs at 90 repair shops in five counties found over 40% of the chain stores trying to sell services or repairs that were not needed. In some cases, shops charged the undercover reporters for services that were never done. According to the KCBS investigative team, shops from the following chains were caught trying to rip off their reporters (the numbers represent the percentage of visits to that chain that involved attempted rip-offs): Midas Muffler & Brake Shops (40%), Montgomery Ward Auto Express (60%), Econo Lube N' Tune (40%), Purrfect Auto Service (60%), and Tuneup Masters (80%).

Midas Muffler & Brake Shops Busted
April, 1997: California's Bureau of Automotive Repair announced its conclusion of an undercover investigation targeting three Midas Muffler & Brake Shops in Burbank, N. Hollywood, and Panorama City. According to the Bureau, ten undercover runs confirmed the sale of unnecessary parts or services. The shops were suspended (closed) for ten days, placed on three years' probation, and fined $15,000. This recent bust brings the California total to 24 Midas shops that have been charged with fraudulent business practices after undercover investigations were done. They paid total fines in excess of $500,000. In Pennsylvania, undercover investigations have resulted in similar charges against 17 Midas shops.

Econo Lube N' Tune Busted, Fined $284,000
December, 1995: California's Bureau of Automotive Repair announced its conclusion of an undercover investigation targeting Econo Lube N' Tune, Inc. The company was accused of selling unnecessary repairs and charging for parts that were never installed at its company-owned stores. A local district attorney got an injunction ordering Econo Lube to change its practices at the 14 company-owned stores in California. The company agreed to the settlement and fine without admitting any wrongdoing. Econo Lube N' Tune operates over 200 shops in ten states (mostly franchises), and they have continually advertised low-priced services and repairs. Since 1990, a total of 41 Econo Lube shops have been caught selling unnecessary repairs during undercover investigations in California.

Purrfect Auto Service--Shops Busted
Since 1996, California's Bureau of Automotive Repair has caught 15 Purrfect Auto Service shops selling unnecessary repairs during undercover investigations. Ten of the shops had their state licenses permanently revoked. Purrfect Auto is a chain of about 100 shops (mostly franchises) located in Arizona, Nevada, and California. Their practices are similar to those of Econo Lube N' Tune (see the above story), with a heavy emphasis on low-priced ads for oil changes, tune-ups, brakes, smog inspections, and other services.

Class-Action Lawsuits vs. Goodyear & KMart Auto Centers
Class-action lawsuits have been filed against KMart and Goodyear Auto Centers over accusations of selling unnecessary parts and services in their company-owned repair shops. (Goodyear was sued in October of 1994 following investigations in Minnesota and Illinois; a settlement was reached in 1997.) The alleged sales of unnecessary repairs were blamed on the companies' use of commissions, contests, and/or quotas that encouraged employees to sell additional parts and services. As in the previous stories, customers were attracted by their heavily advertised low prices. After the KMart lawsuit was filed, the company sold its auto centers to Roger Penske. Penske took over in November of 1995 after announcing that he would retain most of the existing employees.

"Low, Low Prices"
If it sounds too good to be true, it probably is.

Low-priced ads for auto repairs and services are almost always "loss leaders," i.e., there's little-or-no profit in a particular service at the advertised price. So why do companies run those ads? To get more people into their shops so employees can sell them additional repairs or services that aren't on sale. In fact, additional parts and services at these shops are often billed at inflated prices, and in many cases they're not even necessary. Sometimes the "extra" services aren't done and parts are not replaced, but customers are still charged for them. (These are known as "phantom" services and repairs.)

What kinds of shops run these ads? Typically, it's the ones who use quotas, commissions and/or contests to get more sales revenue out of their employees. And the more they advertise cheap repairs (or free inspections), the greater the chance they'll try to sell something that's not really needed. These scams are actually quite common, and many people have fallen for them because they never suspected that a "big-name" company would be using such deceptive practices.

For more information on auto repair scams & secret warranties, be sure to see What Auto Mechanics Don't Want You to Know at Amazon.


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