Kost Tire to pay nearly $300,000 to settle state AG accusations over customer oil-change fees

Kost Tire Distributors, Inc. will pay the state of New York almost $300,000 to settle accusations that it collected a fee from consumers that state law “specifically prohibits.”

New York State Attorney General Eric Schneiderman had accused Kost Tire of charging customers an extra $2 fee for each oil change that the company performed for “several years in violation of New York law,” his office said in a recent news release.

The company was imposing an “oil and filter recycling fee” with each oil change on top of the quoted price for the work, Schneiderman’s office said.

New York’s Environmental Conservation Law specifically prohibits such service stations from charging any fees for accepting and disposing of used oil.

Kost Tire Distributors is a Binghamton–based owner and operator of 25 service stations throughout New York state, including locations in Binghamton, Syracuse, Ithaca, Watertown, and Rochester.

Kost Tire & Auto Service stores are now part of the Mr. Tire Auto Service Centers network, according to the Mr. Tire website. Munro Muffler Brake, Inc. owns the Mr. Tire brand.

“Service stations are required to collect and dispose of used oil free of charge,” Schneiderman said in the news release. “By tacking on a $2 fee, consumers were being charged an inflated price for oil changes under the false pretense that the fee was required by the government. The agreement announced today will continue to protect our environment while also protecting consumers across Upstate New York.”

Schneiderman’s investigation discovered that Kost Tire collected more than $181,500 in these improper fees from customers throughout New York since Jan. 1, 2012.

Additionally, the settlement acknowledged that Kost Tire’s “separately delineating and quoting” an oil and filter-recycling fee on its invoices is “potentially misleading” to customers in that it implies that these charges are mandated by law “when such was not the case.”

As a part of the settlement, Kost Tire agreed that it will comply with New York’s Environmental Conservation Law and “accept and properly” dispose of used oil at no charge to customers and non-customers in quantities up to 5 gallons per day, each.

As a part of the settlement, Kost Tire has agreed to pay the state of New York more than $181,000, or the amount of the “illegally” obtained oil and filter recycling fees, along with a civil penalty of more than $93,000, according to the news release.

Contact Reinhardt at ereinhardt@cnybj.com