Md. to announce Merchant's settlement

Automobile-repair chain to reimburse thousands for parts not installed

January 07, 2003|By Eileen Ambrose | Eileen Ambrose,SUN STAFF

The state attorney general's office is to announce a settlement today with the owner of Merchant's Tire & Auto Centers over charges that its stores didn't install all parts included in service packages sold to a few thousand Marylanders.

Under the settlement, Manassas, Va.-based Merchant's Inc. will reimburse affected motorists and pay a $150,000 civil penalty, $100,000 for consumer education and $65,000 for the state's costs and attorney fees. The company owns 26 centers in Maryland and 88 others in the mid-Atlantic region.

The consumer protection division of the attorney general's office alleged that Merchant's sold brake services with hardware but did not replace the springs and clips that reduce noise and wear and tear. The division also claimed that Merchant's sold transmission services but did not replace the filters as required.

The investigation began in early 2001 after the consumer protection division was notified by a Merchant's employee that the parts were not being installed, said Attorney General J. Joseph Curran Jr.

The company denied the allegations.

Steve Steffens, Merchant's vice president of marketing, said the company agreed to the settlement because "we want to make sure the customer is handled and happy with the service."

Steffens added that the company conducted its own audit that revealed in some cases parts were not listed on the invoice, raising the possibility that the parts were not installed. "The problem may have simply been a failure to document the installation," Steffens said.

"There is absolutely no safety issue involved," he added.

The company said it is installing a new computer system and adopting other controls to prevent a recurrence. Merchant's also is reviewing its records in other states to see if there are problems elsewhere, Steffens said.

Under the settlement, Merchant's will pay $60 to Marylanders who bought brake services with hardware after Jan. 1, 1998, but did not receive an invoice that showed installation of hardware. These customers also are to get an extended warranty on their brakes.

Marylanders are eligible to receive $64.26 if they bought transmission services after January 1998 but did not get an invoice indicating a transmission filter had been installed.

The brakes and transmission packages at the center of Maryland's investigation have not been sold since March 2001, the company said.

Curran said his office will be reviewing invoices and expects to contact the 2,000 to 5,000 consumers eligible for restitution in the summer.

Among those eligible is Maryanne Siegert, who had taken her Saturn in for a 60,000-mile checkup at the Merchant's in Columbia. Siegert said she wasn't aware of any problem until she was contacted by the attorney general's office, and an inspector found that she never received the new transmission filter she paid for.

"I was really offended. ... It's hard enough trusting car repair places," she said.

Joan Harding also went to the Merchant's center in Columbia, and was told by the attorney general's office that she had not received a new transmission filter.

"I was really disturbed," said Harding, adding that from now on she will try to ensure that she gets the new parts she pays for by asking to see the old ones that have been removed.

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