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Caliber Collision Settles Fraud Suit

The Irvine company will pay $5.8 million and provide free auto repairs to end state case.

August 20, 2004|Annette Haddad | Times Staff Writer

Body shop operator Caliber Collision Centers has agreed to pay $5.8 million and provide free repairs to settle allegations that it defrauded customers by billing for services and parts that weren't provided.

The settlement, announced Thursday, resolves a lawsuit filed last year by state Atty. Gen. Bill Lockyer and disciplinary actions taken against the Irvine company by the state Bureau of Automotive Repair.

"Caliber violated the trust of thousands of consumers who came to its shops to get their cars and trucks fixed," Lockyer said.

Caliber said it was relieved to put the matter behind it.

"We are pleased to enter into a new chapter in our dealings with our regulator, and to move forward into a new period of growth for our business," the company said.

In December, Lockyer's office sued the company, alleging that its shops told consumers that the parts they were replacing were new when they were not; misled customers about whether certain repairs were needed and performed repairs without authorization.

The lawsuit was based in part on an investigation by the auto repair bureau.

Under the settlement, all 38 Caliber shops in California will be on probation for three years and 19 of the shops will be suspended from operating for up to five days.

Caliber also will pay $3.3 million in civil penalties and $2.5 million to cover the state's costs.

The company also will provide free repairs to 100 customers identified by the auto repair bureau of being victims of fraud. Caliber will repair those customers' vehicles free of charge, pay for repairs done by another shop or provide full reimbursement.

Beyond those customers, up to 56,000 others who had their cars repaired at Caliber shops between Aug. 1, 2002, and July 31 and paid more than $1,000 for the work will be eligible for restitution. They must first have their vehicles inspected at a Caliber shop to determine whether the repairs were below standards. If so, the company must repair the car again without charge.

The auto repair industry has been pushing to restructure the Bureau of Automotive Repair, which has been aggressive in its enforcement efforts. The industry claims that the agency sometimes acts arbitrarily.

In March, Gov. Arnold Schwarzenegger replaced the head of the bureau, and legislation is pending that would appoint a monitor to review the agency's enforcement process.

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