Big O Tire Franchisee to Settle Fraud Complaint : Auto repair: CSB Partnership will pay $169,000. Investigators say they found 5 stores doing unneeded work.
A franchisee that operates 19 Big O Tire stores has agreed to pay $169,000 to settle allegations of a pattern of automotive repair fraud, the state Department of Consumer Affairs and the Orange County district attorney’s office said Monday.
An undercover investigation revealed that five Big O stores were making an average of nearly $400 in unneeded repairs in each instance and in two cases did not make the repairs that had been ordered by customers, the state Bureau of Automotive Repair found. The stores are in San Clemente, Santa Ana, Tustin, Huntington Beach and El Toro.
The settlement is one of the largest of its kind in Orange County history, said Jim Schoning, chief of the auto repair bureau. The allegations were similar to those that recently rocked the Sears Roebuck & Co. chain of auto repair stores in California.
The licenses of all five stores were revoked, but the revocation was stayed to let the locations remain open under close scrutiny. That procedure will allow the state to close down the shops easily if more complaints are received, Schoning said. “We have them on a very short leash,” he said.
The franchisee that owns the five shops, CSB Partnership in Dana Point, denied allegations that its workers sold unneeded repairs. Chris Phillips, CSB’s managing general partner, said that investigators doctored their test cars to fool his mechanics and that he is only settling to avoid a costly court fight.
He conceded, however, that the two instances in which services were ordered and not received may have occurred, resulting in the termination or resignation of two employees. CSB is whole or part owner of 19 Big O stores, including 10 in Orange County.
Schoning said the investigation was initiated because of a series of customer complaints received over the past few years, all of them directed at stores operated by CSB. The complaints were difficult to track down because of inability to get the key evidence--the used parts--to prove that unnecessary repairs were made.
The undercover operation began in March, 1992. Investigators carefully documented the wear on certain auto parts, then brought the cars to the Big O dealers to see if they correctly diagnosed the problems. At one point, the same car received a new set of brake calipers at each of the two Big O stores where it was taken, Schoning said.
CSB agreed to the settlement with the state Department of Consumer Affairs and the district attorney’s office. It includes $72,000 in civil penalties, $44,091 to reimburse the bureau for the cost of its investigation and $27,999 to reimburse the district attorney’s office for its investigative costs.
The settlement also includes $25,000 in restitution that will be used to purchase automotive tools and equipment for the Orange County Department of Education’s regional occupational programs.
