WOODLAND, Calif.—Wal-Mart Stores Inc. will pay $820,000 to settle a consumer protection action brought by California prosecutors who claimed employees of the retailing giant made fraudulent statements about the company's tire treadwear warranties.
Prosecutors for Yolo and Tulare counties and the City of San Diego announced the settlement May 22.
In the complaint they brought against Wal-Mart, the prosecutors alleged that Wal-Mart Auto Care Center employees refused to honor Wal-Mart's treadwear warranties on Goodyear tires purchased at Wal-Mart stores, claiming they were Goodyear's responsibility.
Wal-Mart employees then told customers they would honor the treadwear warranties only if customers paid $10 for an extra road-hazard warranty, the prosecutors said.
Wal-Mart admitted to no wrongdoing in the settlement agreement, according to the prosecutors, but did agree to train Auto Care Center employees about the material terms of the company's tire warranties.
San Diego, Yolo County and Tulare County will share $735,000 in civil penalties and prosecution costs, according to a press release from the Yolo County District Attorney's Office. Also, the California Tire Recycling Management Fund will receive $50,000 of the settlement money, and the California Consumer Protection Prosecution Trust Fund will get $35,000.
“Warranties are part of the representations made to consumers to induce them to purchase products, and it is vital that consumers be able to rely on those representations should the need arise,” said Jeff Reisig, Yolo County district attorney.