State regulators moved Wednesday to shut down 17 Brake Depot shops in Southern California, two of them in Orange County, accusing the repair chain of a bait-and-switch scheme to defraud customers.
An undercover sting by the California Bureau of Auto Repair revealed a pattern in which San Diego-based Brake Depot lured customers by advertising a $99.98 friction reline, a common brake repair, then sold them unnecessary services costing hundreds of dollars more, regulators said.
"It's an egregious case," said Ken Wardlow, the agency's program manager in San Diego. "In 19 of the 20 times we went into their shops, we were oversold other stuff even though [the friction line] was all we needed."
The state attorney general's office has filed an action to revoke car repair licenses at 15 company-owned stores in San Diego County as well as stores in Lake Forest and Costa Mesa. The Costa Mesa store is relocating to Anaheim.
Based on the same investigation, authorities filed a criminal complaint in San Diego against Brake Depot Inc. President Patrick Walby and his brother, Chief Financial Officer Philip Walby. They were charged with misleading advertising, theft and violating a 1996 civil court order that settled similar allegations by the state.
In the 1996 case, the company paid $100,000 in fines and consumer restitution, but admitted no wrongdoing.
Brake Depot executives said Wednesday they had opened an internal inquiry to address state regulators' findings, but defended the company's record.
"We get very few complaints, so this came out of the blue for us," Marketing Director Steven Opp said. "We shop our own stores and do rigorous training. A company would have to be crazy to play with fire after what we went through in 1996."
Brake Depot has about 75 stores nationwide, including 21 in California. Two California locations are independently owned franchises not affected by Wednesday's legal actions.
Brake Depot has been running ads touting its friction reline deal since early 1997, Opp said. The state opened its investigation last year after receiving at least 100 consumer complaints about Brake Depot stores in the San Diego area, Wardlow said.
San Diego resident David Noel said he went to Brake Depot for the friction reline and came out with a bill for more than $400 in repairs. A week later, after returning to the shop and complaining that his car was making unusual noises and pulling to the right, Noel was charged about $370 for more repairs.
He got a $276 refund after complaining to the local Better Business Bureau, but still feels cheated.
"I was sucked in by that damn commercial," Noel said. "They still owe me, I feel."
Following up on dozens of similar complaints, auto-repair bureau agents visited 10 San Diego Brake Depot locations twice apiece, bringing in cars with worn brake pads and brake shoes, Wardlow said.
Simple friction relines would solve those problems, but agents were told they needed brake fluid flushes, new master cylinders and a variety of other repairs, state officials allege.
On average, their bills totaled $158 more than the friction reline price. In one case, an agent was charged $379 for unnecessary extras, Wardlow said.
On several visits, agents also were charged for repairs never done and parts never replaced, added Michael Rivo, the deputy city attorney who oversees San Diego's consumer and environmental protection unit.