States Secure $51.5 Million Settlement With Firestone
Attorney General Spitzer today announced a multi-state agreement with Bridgestone / Firestone, Inc. that will require the company to pay $51.5 million to settle charges that it sold defective tires and made misrepresentations during its tire replacement program.
Bridgestone/Firestone, Inc. settled cases with all 50 states, the District of Columbia, Puerto Rico, and the Virgin Islands that will provide an estimated $10 million in restitution to consumers and an additional $5 million for a national public service announcement campaign conducted by the states' Attorneys General.
Under today's agreement, New York State will receive $525,000 in civil penalties and costs as part of a $36.5 million monetary payment to all the parties.
These amounts supplement the nearly $450 million Bridgestone/Firestone has already spent on refunds and replacement tires since last summer when the National Highway Traffic and Safety Administration made its first announcement that it had found safety-related defects in some of the company's tires. According to Bridgestone/Firestone, the company has already expended $20.2 million replacing over 217,000 tires in New York State alone.
"This agreement is a significant step forward in improving tire safety across the nation and increasing consumer awareness about the proper use of tires, especially in relation to popular sport utility vehicles," Spitzer said. "It also serves as a lesson to the industry that aggressive action will be taken to address misrepresentations, even confusing and false implications associated with a safety recall."
The joint settlement is the result of numerous consumer protection claims involving alleged misrepresentations the company made during both its sale of tires with high rates of tread separation and during its tire replacement program.
The tires involved include those from three separate tire replacement programs that occurred during August and September of 2000 and October of 2001
The settlement forces Bridgestone/Firestone to reimburse or refer to arbitration consumer complaints already submitted to the company by various Attorneys General or any complaints submitted no later than December 31, 2001. Specifically, any consumers who previously had been denied a refund under the "Voluntary Tire Safety Recall Reimbursement Program" or the "Customer Satisfaction Program" will receive a letter explaining that the individual has the option of seeking reconsideration of the refund denial. Individuals who return their notices with a request for reconsideration will either receive a refund or, if denied, an option to submit their claims to an independent arbitrator at no cost.
The Attorneys General had accused Bridgestone/Firestone of the following practices, all of which the company has agreed to cease:
- failing to conspicuously disclose prior to purchase all material and necessary safety information;
- misrepresenting characteristics, use or durability of tires - by making advertising claims such as "Hunting, Fishing, or camping - wherever you're going, these rough, aggressive tires can take you there" - but then disallowing warranty claims because of "consumer abuse";
- failing to disclose that its tires are defective or to disclose secret warranty programs to customers;
- making misrepresentations regarding appropriate tire use such as: falsely claiming a tire to be appropriate for highway use at maximum posted speed and maximum weight at expected driving conditions; falsely claiming as appropriate a tire's use on sport utility vehicles; and misrepresenting the number of miles or years the tires would be useful;
- making misrepresentations about a recall or customer satisfaction program, such as engaging in bait and switch, charging consumers for items promised or promoted as free, and when replacing tires for a customer who requested ones not manufactured by Bridgestone/Firestone, using "private label" tires in fact made by the company;
- promoting or implying that the company would provide an expert with all information needed to evaluate a problem and then failing to do so;
- misrepresenting the rights and remedies provided for in a warranty or implying that a tire would be replaced with an "equivalent" tire and then failing to do so;
- advertising or promoting a warranty or guarantee that would mislead customers into believing that the tire provided a greater degree of serviceability or durability without competent, reliable scientific evidence; and
- retroactively changing a warranty or guarantee by, for example, claiming to "expand" it despite reductions in certain terms of coverage.
In addition, Bridgestone/Firestone is required to substantiate with competent and reliable scientific evidence any safety, performance and durability claims.
The terms of the settlement also require Bridgestone/Firestone to provide detailed safety consumer information at the time of tire delivery including information about: proper tire maintenance; load capacity; air pressure; proper tire repair; and warranty information.
Individuals with questions related to the settlement with Bridgestone/Firestone are encouraged to contact the Attorney General's consumer help line at (800) 771-7755.
This case was handled by Assistant Attorneys General Stephen Mindell and Herbert Israel of the Consumer Frauds and Protection Bureau.
For Adobe PDF files you can download Adobe Reader from Adobe Systems.