(CN) – The owner of 22 Midas auto shops in California agreed to pay $1.8 million to settle claims that he ran bait-and-switch operations by charging for unnecessary or bogus repairs.
According to California Attorney General Jerry Brown, franchise owner Maurice Irving Glad “deceptively lured customers into his Midas shops with cheap brake specials, then charged them hundreds of dollars more for unnecessary repairs.”
Brown sued Glad in June 2009 after a four-year investigation by the California Bureau of Automotive Repair revealed that Glad drew in customers with $79 to $99 brake specials and then charged them an additional $110 to $130 in unnecessary brake-rotor resurfacing services. In some cases, Brown said, Glad billed customers hundreds of dollars for repairs that were unnecessary or were never performed.
Glad agreed to pay $1.8 million in damages, investigative costs and attorney fees to settle the suit. He is banned from ever owning or operating a repair shop in the state.
Brown’s investigation, which involved 30 sting operations, found 105 violations in which managers, mechanics and employees at Glad’s shops pressured customers into buying unnecessary parts and services. The shops charged undercover agents an average of $300 in unnecessary brake-rotor resurfacings, brake-drum repairs and other services, Brown said in a statement.
Brown ordered the investigation to ensure compliance with an earlier injunction stemming from a 1989 lawsuit making similar allegations against Glad.
Brown’s recent case against the franchisee alleged false advertising, and unfair and fraudulent business practices.
As part of the settlement, Midas International Corporation will take over all of Glad’s shops, which will stay open. Midas also said it will honor all guarantees and warranties made at Glad’s shops.