Making choices and exercising judgment.Econo-lube (taken from the ACFE educator documents...

Making choices and exercising judgment.Econo-lube (taken from the ACFE educator documents at www.cfenet.com).

While living in St. George, Jeff received a coupon in the mail for an oil change for $9.95 at a local Econo-lube. He thought $9.95 was a good deal so he decided to give Econo-lube a try. When Jeff arrived at Econo-lube, the waiting room had approximately five people obviously waiting for their cars to be serviced. He went to the service counter and was greeted by the owner.

Jeff explained to the owner that he would like to use his coupon for the $9.95 oil change. The owner acted very friendly and told him that the price of $9.95 did not actually include a $3.00 oil disposal fee. Also, the coupon was only good for cars that required four quarts of oil so Jeff would have to purchase one more quart to meet the requirements of his car. So the price would be $14.90. Next, Jeff asked for Valvoline 30wt oil because that was what his uncle, who repairs his own work vehicles, recommended he use in this car. The owner immediately told Jeff that 30wt was not right and proceeded to tell Jeff all about his high performance Porsche that he never runs 30wt oil in. Jeff’s 1989 Honda was definitely not a Porsche so he persisted. The owner finally agreed to use 30wt oil on the condition that Jeff signs a liability waiver. Jeff also had to pay an extra dollar for each quart of Valvoline brand oil because Econo-lube used a different brand. The $9.95 oil change was now up to $18.90.

Jeff sat down next to a young looking man named Rick who told him he was also in for the great deal on an oil change. As they talked, Jeff learned that this man was recently married and was planning to start college in the fall.

The owner called Rick’s name and invited him into the shop to review the “free diagnostic check” details Econo-lube had performed on his car. Rick was with the owner about 5 minutes and came back ghostly white. Jeff asked him what was wrong. He explained that his car was in bad shape. In fact, he felt lucky it had not broken down yet. He was sick that the amount of his estimate was now over $300. When Jeff asked if he was going to let the owner do the work he replied: “Do I really have a choice? My car is in bad shape.” He had already given the OK.

After a while the owner called Jeff’s name. He greeted Jeff gravely, asked him to come with him into his shop, and told him that his Honda needed some help. He then proceeded through a detailed checklist and showed Jeff everything that was wrong. Apparently, Jeff was lucky not to be dead because his brakes were on the brink of failing. Also, Jeff was told his transmission fluid needed to be drained and the filter replaced—for added effect the mechanic showed how he had opened the plug and saw that the fluid was black. There were also a lot of small “preventative maintenance items.” The final item the owner discussed with Jeff was that the O2 sensor needed to be replaced. Of course, Jeff did not know what an O2 sensor was so the owner explained it to him in great detail. In the end Jeff’s bill for the oil change was going to be over $400! The good news was that he could have it all done in a couple of hours.

Jeff was tempted to have the charges done, but politely declined and asked for the basic $9.95 oil change (which cost $18.90). Later, Jeff drove the car to an uncle’s house and went through a copy of the same checklist with him. About half of the small preventive maintenance items were legitimate things that the uncle recommended. The total of these items cost Jeff no more than $50. The expensive items listed (brakes, transmission filter replacement, O2 sensor) were in good shape and did not need to be replaced at all. In fact, because Jeff’s car was a standard transmission, it did not even have a transmission filter.

Jeff and his uncle checked the transmission fluid themselves and found it to be clean and clear. Jeff was upset that the owner of the shop would try to take advantage of him so badly but did not pursue the issue any farther.

Did the owner of the Econo-lube in St. George commit fraud? What precautions or controls can consumers use to prevent them from being taken advantage of in a situation like this? Were there any symptoms or indications of fraud present in this case?