CHICAGO, June 17, 1999 -- A class-action lawsuit filed in Illinois claims Sears defrauded customers of $400 million by charging for wheel balancing it did not perform. The suit charges that up to 30 million customers were defrauded between 1989 and 1994. A Sears spokesman called the charges "false and unsubstantiated."
Sears settled a similar case in Florida recently by admitting no wrongdoing while paying $580,000 to the state and offering free wheel balancing to customers.
The suit also claims that Sears destroyed the machines used in the alleged fraud and paid $30 million in "hush money" to employees and vendors.
Sears' auto repair operation has been plagued with fraud charges for years. In 1992, the company agreed to distribute over $46 million to customers to settle allegations that it systematically over-charged customers and performed unnecessary repairs.
Recently, the company settled another suit in Florida, this one claiming that Sears sold used car batteries as new ones. It agreed to pay $985,000 and offered free replacement warranties to customers covered by the action.
Sears is the nation's second-largest retailer.
