In the arena of alleged automotive service fraud, 1994 brought charges, countercharges and further rumblings about regulating the industry. The Sears, Roebuck and Co. scandal of 1992 seemed to open a Pandora's Box of fraud allegations no one has been able to slam shut.
To date, the charges being bandied about are just that-charges. No major service provider was convicted of perpetrating fraud on unwary consumers last year.
KMART'S GOT 'CLASS'
One of the big lawsuits of 1993 -against Kmart Corp.-is still lumbering through the courts. However, last Aug. 26 it was finally granted class action status by an Oklahoma judge.
The suit alleges the nation's second-largest retailer ``ripped off'' thousands of auto service consumers by deliberately selling unneeded parts and unnecessary or never-done service. It could cost Troy, Mich.-based Kmart billions of dollars in damages.
Kmart has asked the Oklahoma Supreme Court to review the class action designation.
TV NEWS VS. GOODYEAR
Undercover television news investigations of Goodyear's automotive service operations in 1994 were the bane of the Akron-based tire maker.
In March, a Chicago television station charged that some Goodyear-owned stores in the city were defrauding customers.
Following the television report, the Illinois Attorney General and the Consumer Fraud Division of Cook County State's Attorney began a joint inquiry into Chicago-area Goodyear stores after receiving ``several complaints from Illinois consumers.'' The investigation remains ongoing.
Then, in October, the ABC News program 20/20 aired what it described as a seven-month, ``major investigation of some of the biggest names in the automotive repair business,'' including Goodyear, Kmart and Firestone Tire & Service Centers. However, the TV report keyed mostly on Goodyear's operations.
The ``open season'' on Goodyear continued through to the year's end when the same Tulsa, Okla., attorney handling the litigation against Kmart lobbed a volley at Goodyear-a lawsuit alleging that the tire maker had defrauded thousands of auto service consumers at its stores nationwide since at least 1988. The suit sought class action status and has not yet entered the discovery stage.
Following all the investigations, Goodyear denied the charges and has not admitted any guilt.
Meanwhile, the company announced in May it would no longer pay its technicians commissions that are based on sales of auto parts and services-a moved aimed at enhancing consumer trust in auto repairs.
The tire maker also initiated a program called ``Customer Trust,'' which provides customers with three levels of auto service and allows them to ``call the shots'' when it comes to auto service work performed.
FREON FREEZE
A tire dealer from Missouri had the dubious distinction of being the first person in the country prosecuted for violating the federal Clean Air Act.
George Hofele, 53, president of the one-outlet G*&*H Tire and Auto Inc. in Marlborough, Mo., pleaded guilty May 11 in federal court to willfully releasing the refrigerant Freon into the atmosphere while servicing as many as 60 vehicle air conditioners.
Facing a $250,000 fine and up to five years in prison, he decided to cooperate with authorities and, consequently, was fined $5,000 and placed on probation.
Interviewed by TIRE BUSINESS, Mr. Hofele maintained his innocence, but investigators said they observed the dealer venting Freon without using proper A/C service and recovery equipment.
REFORM BEGUN
Florida's Department of Agriculture and Consumer Services, which regulates repair shops, reported last year that the number of written auto service complaints it had received dropped by 50 percent.
The reason? Beginning in late 1993, shops were required to register with the state. The law also gave the department the authority to fine or shut down shops that defraud the public.
Meanwhile the Maintenance Awareness Program (MAP), born in June 1992 in the wake of the Sears scandal, started gaining momentum last year. So much so that it split from the Automotive Parts & Accessories Association and began operating under the auspices of a new organization, the Automotive Maintenance and Repair Association, based in Washington, D.C.
The group is attempting to restore consumer trust in service shops. Thus far, it has devised repair and maintenance guidelines covering exhaust, brake, suspension and steering systems-including tires and wheels-and eventually will cover every vehicle operating system.
Although voluntary, many large repair shops have already pledged to follow the standards.
And in cooperation with Better Business Bureaus across the U.S., MAP is developing a dispute resolution system to help service shop customers adjudicate complaints.