From the daily archives: Monday, January 25, 2010

SAN DIEGO – (Business Wire) Capital provided to San Diego and Imperial County small businesses through the SBA’s loan guaranty programs during the first quarter of 2010 surpassed the same period a year ago in both loan numbers and dollar amounts. Total loan dollars increased to $70 million from $45 million a year ago, a 56% increase. A total of 143 loans were approved during the three-month period this year, compared to 123 for the same period last year, a 16% increase in the number of loans.

San Diego SBA Director Ruben Garcia pointed to two reasons why loan volume is on the rise. The first is that the SBA received $730 million in the American Recovery and Reinvestment Act to help unlock the small business lending market and to get capital flowing again to America’s small businesses. This allowed SBA to eliminate and reduce fees for borrowers on loans and to increase the guaranty to lenders from 75-85 percent up to 90 percent, thereby reducing their risk.

“The other reason is economic,” Garcia noted. “The newly unemployed often find self-employment or entrepreneurship a viable option. In turn, the SBA becomes a likely resource for financing as well as counseling.”

For a list of the Top 25 lenders participating in the SBA loan guaranty programs within the San Diego district, contact Cynthia Harris at 619-727-4884 or cynthia.harris@sba.gov.

To serve budding entrepreneurs as well as existing small business owners, SBA’s San Diego district office also offers technical assistance through the Southern California Small Business Development Center Network and SCORE (Counselors to America’s Small Businesses). For more information on available sources of counseling and training go to http://www.sba.gov/localresources/district/ca/sandiego/counselingt/index.html.

In the Small Business Act of July 30, 1953, Congress created the U.S. Small Business Administration, whose function is to “aid, counsel, assist, and protect, insofar as is possible, the interests of small business concerns.” Since its founding more than a half-century ago, the U.S. Small Business Administration has delivered about 24 million loans, loan guaranties, contracts, counseling sessions and other forms of assistance to small businesses.

To learn more about the SBA call 619-727-4884 or visit the web at www.sba.gov/ca/sandiego. The SBA extends its programs to the public on a nondiscriminatory basis.

 

Brown Reaches $1.8 Million Settlement with Owner of 22 Midas Auto Shops Over Massive Bait-and-Switch Scheme

Oakland – Attorney General Edmund G. Brown Jr. today announced a $1.8 million settlement preventing Maurice Irving Glad, owner of 22 Midas auto shops throughout California, from owning or operating an auto repair shop in the state, after the franchisee “deceptively lured” customers with cheap brake specials and then charged hundreds of dollars for unnecessary repairs.

As part of the settlement, Midas International Corporation is acquiring all of Glad’s shops, which therefore will continue to operate without interruption.

“For years, Glad ran a bait-and-switch scam, in which he deceptively lured customers into his Midas shops with cheap brake specials, then charged them hundreds of dollars more for unnecessary repairs,” Brown said. “Our settlement makes sure that Glad will never own or operate an auto repair shop in California again.”

After a four-year undercover investigation by the California Bureau of Automotive Repair, Brown filed suit against Glad in June 2009. The investigation revealed that Glad regularly advertised $79 to $99 brake specials at his Midas shops to draw in customers and then often charged another $110 to $130 for unnecessary brake-rotor resurfacing. In some cases, customers were charged hundreds of dollars more for repairs that were not needed or never performed.

The settlement requires Glad to pay $1.8 million in damages, investigative costs and attorney fees, plus permanently prevents the franchisee from:

– Applying for or holding any license or registration issued by the California Bureau of Automotive Repair or any successor agency; and
– Engaging in any business that requires any type of license or registration issued by the California Bureau of Automotive Repair or any successor agency.

In addition to acquiring Glad’s 22 shops, Midas International Corporation has agreed to honor any and all guarantees or warranties previously made or given to customers.

In 1989, the state attorney general sued Glad for similar violations, which resulted in an injunction prohibiting his shops from performing unnecessary repairs, charging for services not performed, or using scare tactics to convince customers to purchase unnecessary parts and services. The California Bureau of Automotive Repair initiated its recent investigation into Glad’s Midas shops to monitor compliance with the injunction.

Undercover agents, posing as customers, conducted approximately 30 sting operations at Glad’s shops. In total, there were more than 35 incidents, involving 105 violations, in which shop managers, mechanics and employees made false or misleading statements to pressure customers into purchasing unnecessary parts and services. On average, the shops charged undercover agents almost $300 in unnecessary brake-rotor resurfacings, brake-drum repairs, brake adjustments, brake-cleaning services and other services.

“Overselling of services has become an increasing problem,” said California Bureau of Automotive Repair Chief Sherry Mehl. “It amounts to fraud and seriously harms the consumer. That’s why we aggressively work to find and shut down these shops.”

Brown’s lawsuit was filed jointly with Alameda County District Attorney Tom Orloff (then) and Fresno County District Attorney Elizabeth A. Egan, due to the large number of shops operating in Alameda and Fresno Counties. Glad’s 22 Midas shops are located in Campbell, Clovis, Concord, Dublin, Fremont, Fresno, Hayward, Manteca, Merced, Modesto, San Jose, San Leandro, Turlock and Walnut Creek.

Brown’s lawsuit contended that Glad and his shops:

– Used false and misleading advertising in violation of Business and Professions Code 17500;
– Employed unlawful, unfair and fraudulent business practices in violation of Business and Professions Code 17200; and
– Disobeyed the 1989 Alameda County Superior Court injunction in violation of Business and Professions Code 17535.5 and 17207.

“The Department of Consumer Affairs has zero tolerance for consumer fraud,” said California Department of Consumer Affairs Director Brian Stiger. “We are very pleased that, in partnership with the Attorney General’s office, we have been able to stop a bad player from further harming both consumers and the hard-working, law-abiding players in the auto repair industry.”

Consumers who believe they have been overcharged by an auto-repair facility can file a complaint with the California Department of Consumer Affairs, Bureau of Automotive Repair online at: www.autorepair.ca.gov or by calling 1-800-952-5210.

 
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