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New Jersey Sues Sears Roebuck Over Alleged Fraudulent  Practices at Auto Repair Centers

NEWARK —  New Jersey is suing Sears Roebuck and Company for running auto repair centers that allegedly cheated hundreds of consumers in connection with, among other things, the sale of four-wheel alignment service, James E. McGreevey, Attorney General David Samson and New Jersey Division of Consumer Affairs Director Reni Erdos announced today.


The State’s five-count complaint, filed in Hudson County Superior Court on October 10, 2002, alleges that Sears Auto Repair centers throughout New Jersey have repeatedly violated the State’s Consumer Fraud Act by engaging in fraudulent practices.  Sears Roebuck, based in Hoffman Estates, Ill., owns and operates the nationwide chain of Sears Auto Repair facilities.


“New Jersey will not tolerate consumer fraud. We will aggressively prosecute any companies that victimize consumers with false and misleading practices,” said McGreevey.


Following an undercover investigation of 19 Sears Auto Repair centers in New Jersey and an expert review and analysis of records subpoenaed from Sears Auto Repair centers in New Jersey, the State has uncovered more than 350 instances involving violations of the State’s Consumer Fraud Act and regulations governing automotive repair.  The number of violations is likely to climb upon additional review of documents during the course of the litigation.


For example, the complaint alleges, personnel routinely charged for four-wheel alignments on vehicles for which such service was impossible.  The investigation revealed that many of the cars in question were built to undergo only two-wheel alignments -- which involves adjustments to only the front wheels -- or four-wheel alignments only with the addition of an after-market kit.  In many instances, such after-market kits were not present on or added to the cars and, as a result, four-wheel alignments of the cars in question would be impossible.  Despite this, subpoenaed documents reveal that consumers were repeatedly charged for such service.


“This case has nationwide implications,” Attorney General Samson said.  “Business operators in New Jersey, whether local or national, must understand that we will impose a zero-tolerance on fraud.  Practices that violate our laws and that also violate basic standards of morality will be the bases of aggressive action by our Department. 


“This complaint is the result of an intensive investigation which covered a review of documents from Sears Auto Repair centers.  It included undercover investigations at 19 Sears centers, through which we uncovered hundreds of auto repair violations.  These investigations are continuing and will be incorporated into this action.  We brought this action at this time to stop what we believe to be a far-reaching pattern and practice of fraud at Sears Auto Repair centers.  We will continue to pursue this matter until we are certain all consumers harmed as part of this fraud recover what is due to them,” Samson said.


“We are suing Sears because it has failed New Jersey consumers by deceiving them and ignoring State law,” Erdos said.  “Sears and other corporations need to understand that when they are doing business in this State, they are expected to play by the rules or face the consequences.”


The State’s complaint also alleges that Sears:


                                   Failed to obtain consumers’ authorization before completing work on their vehicles.  On numerous occasions, the company represented to consumers that personnel would conduct a “free” inspection of their vehicles’ alignment, but instead of doing the inspection and seeking the consumers’ authorization, Sears’ personnel would complete the repairs and bill consumers for the work performed.


                    Performed defective repairs, including failing to tighten lug nuts and/or resurfacing brake rotors to the point where they were below manufacturers specification.


                    Made deceptive or misleading statements to entice consumers into authorizing and paying for unnecessary repairs.


                                                            Failed to provide consumers with written estimates.


This is not the first time Sears has run afoul of New Jersey’s auto repair laws.  In 1992, Sears agreed to pay $200,000 to establish an Automotive Repair Industry Reform Fund and pay penalties and consumer restitution to settle allegations that Sears Auto Repair centers engaged in fraudulent practices.  In 1997, Sears entered into a supplemental agreement with New Jersey to pay penalties and costs for failing to advise auto repair customers of their rights under State law.           


The State’s suit seeks an order requiring the company to pay restitution to affected consumers, and monetary penalties under the Consumer Fraud Act.


Deputy Attorney General David Puteska of the Division of Law is handling this matter for the State.




New Jersey Sues Sears Roebuck Over Alleged Fraudulent Practices at Auto Repair Centers

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