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Independent Glass Installers File
Suit against AAA Michigan and Harmon Glass
Group Alleges Unfair & Deceptive
Trade Practices by Steering Customers to a Minnesota-Based Glass
Company
FARMINGTON HILLS,
Mich., A coalition of independent glass installers have filed a
lawsuit against AAA of Michigan and Harmon Glass to halt deceptive
practices, protect the consumer's right of choice, and to halt unfair
trade practices.
The lawsuit filed May 20, 1999 by attorney Jay
Schwartz, was assigned to Wayne Circuit Court Judge Isidore Torres who
ordered a hearing for 9 a.m. June 22 for AAA and Harmon to show cause
why a preliminary injunction should not be issued.
Some 48 vehicle glass installers from throughout
Michigan are demanding changes from AAA. Namely, that AAA insist
that Harmon Glass ends its deceitful acts, stops misleading consumers,
and quits asking for proprietary information from independent glass
installers as a condition of processing AAA claims.
"AAA was warned about Harmon before starting
down this path," said attorney Jay Schwartz of Schwartz Law Firm
in Farmington Hills, Michigan. "What is occurring is completely
outrageous. Consumers should have the freedom to pick their auto
glass repair shop without steering attempts."
The campaign also will include a public education
effort and a petition drive to enact anti-steering legislation in
Michigan. According to the Washington office of the Automotive
Service Association, some 38 states in the U.S. as of January 1999 had
anti-steering legislation on the books -- Michigan does not.
Steering is the process of referring consumers to a particular shop
without informing them other choices exist. Many of the
plaintiffs have presented AAA with an alternative call center which
would guarantee AAA and consumers that fair trade practices would be
followed.
According to the lawsuit, when a consumer calls AAA
with a glass claim they are referred to Harmon Glass who signed a
contract with AAA to operate a call center to process glass damage
claims. The Harmon workers identify themselves as AAA, attempt
to steer the customer to one of Harmon's facilities, and will dissuade
the customer from using independent installers operating in the
consumer's neighborhood.
Furthermore, for an independent glass shop to
qualify as a Harmon Glass Provider Shop, the owner must provide to
Harmon, sales, billing and marketing information, costs, profit
margins and other proprietary customer information. The suit
also alleges that payments from Harmon Glass to the independent glass providers is not done in a timely manner causing
considerable monetary damage to the plaintiffs.
"My clients firmly believe consumers should
have the ability to go to the glass shop of their choice," added
Schwartz, "and they are adamantly against handing proprietary
information over to Harmon Glass who, in effect, is a competitor.
We hope AAA and Harmon would change their behavior. We welcome
fair and honest competition."
Earlier this year, AAA signed a contract with
Harmon Glass to handle administration of all auto glass claims.
Based in Minnesota, Harmon is a direct competitor with every
Michigan-based glass installation company, said Hank Weber, president
of Auto One, Jackson, Michigan and a co-plaintiff.
"The first issue of the lawsuit is consumer
choice," stressed Weber. "The second issue is to
protect the established glass shops' right to do business with our
customers. It is grossly unfair that as a condition of doing
business with a state regulated insurance company, we must provide
proprietary information to a competitor. The result we really
want is to cease this relationship which prevents free access for
consumers and glass shops."
Bob Blackmer, president of Auto Ameristar,
Westland, Michigan, comments, "From our vantage point the issue
is of using the position of gatekeeper to force our shops out of
business. If this relationship is allowed to continue and given
sanction, we will go the way of the 'mom and pop' drug stores.
I'm appalled that the largest insurance company in Michigan would
allow Harmon to do what they are doing."
"AAA cannot see it is shooting itself in the
foot," explains Bill Farrah, President, IXL Glass, Grosse Point,
Michigan. "They are reaching beyond the ethical standards
self-imposed by most businesses." Ethics is also a serious
concern of co-plaintiff Daniel Eerdmans, V.P., Vision Auto Glass,
Jenison, Michigan, "When competition is controlled and
eliminated, the end result usually does not favor the consumer."
The lawsuit specifically charges AAA and Harmon
Glass of unfair trade practices under the Michigan Consumer Protection
Act; violation of the Michigan Uniform Trade Secrets Act by Harmon;
AAA and Harmon with unfair competition; and AAA and Harmon with
tortuous interference with business relations. |
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