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EZ Lube to Pay $5 Million to Settle Fraud Case

January 03, 2008

SANTA ANA, Calif. --- Auto repair chain EZ Lube Inc. has agreed to pay $5 million in a civil settlement for unfair business practices, the Los Angeles Times reported.The settlement follows a two-year investigation conducted by the Orange County District Attorney's Office and the California Bureau of Automotive Repair. The investigation involved undercover agents posing as customers. The D.A.'s office said the undercover agents encountered dishonest conduct in 30 of the chain's more than 75 stores in southern California.Susan Kang Schroeder, a spokeswoman for the D.A.'s office, told the Los Angeles Times that EZ Lube's most notable violations included recommending unneeded services and charging for services never performed. "They had a policy requiring each person who came in to be sold a minimum of $75 in services," she said.But John Allen, EZ Lube's vice president of operations, denied that the company set out to defraud customers. He added that the company has "had a turnover in employees" since the investigation, and any problems have been corrected.The terms of the settlement require EZ Lube to refrain from making misleading written or verbal statements to customers. Settlement provisions also mandate that EZ Lube document all services and charges, eliminate employee quotas requring minimum average sales tickets, and install video cameras that let customers in waiting rooms watch work being performed on their cars, the L.A. Times reported.
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