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When Upselling Becomes Unlawful Under the Automotive Repair Act

The California Automotive Repair Act (the “Act”), codified as California Business and Professions Code section 9800 et seq., was enacted by the California Legislature in 1971 in an attempt to regulate automotive repair dealers, namely those who engage in the business of repairing or diagnosing malfunctions of motor vehicles.  Under the terms of the Act, the Bureau of Automotive Repair (the “Bureau”) is responsible for enforcing and administering the Act by adopting and enforcing regulations necessary to protect the public.

In a recent administrative accusation, the Bureau and State Attorney General accused a number of Midas repair facilities of multiple violations of the Act and related regulations.  More specifically, the Bureau alleged that the shops committed fraud by advertising cheap inspections or services to lure in customers.   The shops would then diagnose serious non-existent problems requiring costly repairs.  After receiving numerous consumer complaints, the Bureau sent a number of undercover shoppers to the relevant Midas facilities.  In its August 2010 Bulletin, the California New Car Dealers Association pulled the following cases from the accusation in an effort to aid automotive repair facilities in determining when upselling, i.e. inducing the customer to purchase more expensive items in order to make a more profitable sale, becomes unlawful:

  • An undercover shopper took a vehicle in for a $21.95 brake special.  The vehicle had been pre-inspected to guarantee that the only problem with the vehicle was that it needed a new set of front brake pads.  A couple of hours after dropping off the vehicle, the customer was told that the following repairs needed to be made: the front rotors needed to be “procut” in order to be saved; the rear rotors need to be adjusted and cleaned; the brake system needed to be flushed; the cooling system needed to be flushed; and the bottom radiator hoses needed to be replaced.  The estimated cost to repair the damage was $642.00.
  • An undercover shopper took in a vehicle with a coupon for a free brake inspection.  Again, the vehicle had been pre-inspected to guarantee that it was not in need of any repairs.  Later that day, the customer was told that the following repairs needed to be made: the rear rotors needed to be replaced; the front rotors needed to be resurfaced; and all four brake pads needed to be replaced.  The estimated cost to repair the damage was $1,847.00.

While some amount of upselling is permissible, automotive repair facilities should use these examples as a guide to avoid engaging in impermissible conduct as violations of the Act can have serious consequences.  Common disciplinary actions that result from a formal investigation include revocation of the facility’s registration or license, suspension of operations for a specified period of time, probation or any combination thereof.

Erica A. Stuckey

estuckey@carnaclaw.com