(CN) – A Midas auto repair franchisee must pay $1.8 million in a settlement with California, which says his shops lured in customers with specials on brakes and then charged them for unnecessary repairs. Midas will buy defendant Mike Glad’s 22 shops in the Central Valley and Bay Area, and Glad cannot own or operate an auto repair shop in California anymore under terms of the settlement.
Attorney General Gerry Brown said Glad misled consumers with $79 to $99 brake specials and then charged another $110 to $130 for unnecessary brake-rotor resurfacing – and sometimes charged for work that wasn’t done at all.
Brown’s office sued Glad in June 2009 after a 4-year undercover investigation by the California Bureau of Automotive Repair.
Undercover agents posed as consumers in about 30 sting operations at Glad’s shops, which resulted in 105 violations, the state says. Glad’s employees or mechanics charged undercover agents an average of $300 in unnecessary brake-drum repairs, brake-rotor resurfacings, brake-cleaning service and brake adjustments.
Glad must sell all of his shops to Midas International Corp., which will continue to operate the shops without interruption.
In 1989, the California attorney general sued Glad for running a similar bait-and-switch scam and enjoined him from continuing it. The latest investigation was carried out to monitor compliance with that injunction.