At 22 auto shops in the Bay Area and Central Valley, the Midas touch comes with sticky fingers, according to a lawsuit Attorney General Jerry Brown filed Tuesday in Alameda County.
The complaint, stemming from an undercover sting from 2005 to 2007, charges the franchise owner with bait-and-switch practices that cost nearly $300 on average in unneeded, and in some cases unperformed, brake service. Alameda and Fresno counties joined in the complaint, which also charges the franchise owner, Maurice Irving Glad, with violating the terms of a 20-year-old injunction that set permanent restrictions on his companies over certain business practices.
"We're looking at the largest Midas franchisee in California, and we're also looking at a case that involves violations of a previous injunction," said Evan Westrup, a spokesman for Brown. "That injunction was designed to prohibit the very same behavior that's continuing."
The franchises include Midas shops on Main Street in Walnut Creek, Monument Boulevard in Concord, Village Parkway in Dublin, two shops on North Blackstone Avenue in Fremont, a pair of Hayward shops, one in San Leandro and four in San Jose.
A separate administrative law case against Glad, based on the same undercover sting, was launched last year and could result in fines or shutdowns of some shops. A hearing is scheduled for August.
Glad is president of M.I. Glad, Inc, Be Glad, Inc. and So Glad, Inc. His lawyer, Walnut
"They made up symptoms, artificially aged the rotors. They ground down the brakes. They created a completely artificial situation," said Gagen. "In this case, very few if any consumers were involved. Of the 28 complaints we are aware of from 2005 to the present, 24 of them are BAR undercover operatives who have done things to the car and created a false situation."
Glenn Mason, spokesman for the state Department of Consumer Affairs, would not comment on Gagen's allegations. During the three-year investigation, the automotive repair bureau used two dozen undercover vehicles to gather evidence of 105 alleged violations. According to the allegations, the Midas shops used "brake specials" to draw in customers, then made false or misleading statements to pressure customers to buy unnecessary parts and services. In some cases promised work was never done. In other cases customers did not receive proper paperwork, or appropriate tests were not done before a diagnosis.
If successful, Brown's office says, the lawsuit would require the Midas shops to pay as much as $2,500 per violation, and as much as $12,000 per violation for violating the 1989 injunction.
"If there's a settlement, ultimately we would be reaching out to individual victims," said Scott Patton, an Alameda County deputy district attorney. "It would be too early to talk about that."
Reach John Simerman at 925-943-8072 or firstname.lastname@example.org.