'Budget Brakes' Owner Has Troubled Past

'Budget Brakes' Owner Has Troubled Past

CREATED Sep 20, 2006
(Story created: 2/18/04)

A NewsChannel 5 "Buyer Beware" Investigation has uncovered questionable practices inside a local brake repair chain.

We also began digging into the background of the company's owner.

Investigative reporter Jennifer Kraus discovered he's been in trouble before, for some of the same things we uncovered.

You've probably seen the Budget Brakes commercials and the company's signs around town.

They make it sound like you're getting a real deal. Budget Brakes not only offers free brake inspections, but they also say they'll sell you new brakes for just $68.

But former managers like Jack Hays say, "$68 is to get people in the store. That's it."

Hays tells NewsChannel 5 that most customers end up paying a lot more. Usually, he says, the bill's at least several hundred dollars and many customers are charged for parts and services they don't need.

"It doesn't surprise me," says Kirk Ferris from the Michigan Department of State.

Ferris says he's heard this all before when the owner of Budget Brakes ran a similar operation up in Michigan called the Brake Shops.

In one of that state's biggest investigations ever, Ferris tells us that regulators found that Brake Shops employees were taught how to be deceptive and told to sell whatever they could.

Ferris says employees were told, "You need to sell parts and you need to sell service whether it's needed or not." He says the state of Michigan also found that customers were often significantly overcharged and repairs were often not done right or done at all.

"We were convinced they had to be put out of business," Ferris adds.

The Michigan Department of State and Attorney General ended up fining the owners nearly $20,000 and suspended them from doing business.

That's when they moved to Tennessee.

Michael Palazzolo and his partner Paul Sims opened their first Budget Brakes shop in Nashville three years ago. There are now four stores in Nashville and a total of six in Middle Tennessee.

Palazzolo now has a new partner and, he claims, a new way of doing business.

He insists that he's changed since he moved to Tennessee and that what he does here is all on the up and up.

"Why do you think we've done what we've done -- 51,000 vehicles," Palazzolo says. "You tell me. How do we do that in two and a half years, almost three years? Taking care of the customer, taking care of your employees, quality service."

But authorities in Michigan say they've heard that before.

"I was also told by Michael Palazzolo that he had changed his ways and wanted to do things right," Ferris says, "but that wasn't what we saw."

And those who have worked for Palazzolo since he's moved here say he hasn't changed at all.

And our undercover investigation seems to back that up.

We took our van to all four Budget Brakes shops in town and asked for their free inspection. And by and large, the mechanics barely glanced at our brakes.

Yet, Budget Brakes managers told us they'd found we needed all sorts of repairs, including brand new rotors -- even though we had just had our brakes overhauled.

We also discovered they actually charged us for work that they never did.

After three of the Budget Brakes shops told us we needed our back brakes cleaned and adjusted, we decided to go ahead and do it.

Our hidden cameras showed how our back brakes got a few squirts of what supposedly was cleaning fluid -- and that was it.

Then the mechanic put the tires back on. He never did do the adjustment, even though that's what we were told we needed and what we paid for.

We showed our video to David Brockus, another former manager with Budget Brakes.

"It's a typical Budget Brakes' job," Brockus says.

Brockus says when he worked for Budget Brakes, if a car needed a part they didn't have, they'd just clean up the customer's old part, put it back on and then charge the customer for the new part.

"That is bull," says Budget Brakes' owner, Michael Palazzolo.

He calls the allegations by his former employees lies and he told us he really doesn't see a problem with what we uncovered.

"We didn't do anything wrong," he says.

But the Middle Tennessee Better Business Bureau is now taking the rare step of revoking Budget Brakes' membership. The BBB's Kathleen Calligan says, "There's certainly no room in the business community for individuals like this."

The BBB says when Palazzolo applied to join, he never told them about his business troubles in Michigan, even though they say he was asked.

"I really don't remember doing it," Palazzolo says.

He told us that he'd simply forgotten to mention it.

Then, he later admitted that he'd omitted the information on purpose because he was afraid he wouldn't be allowed to join if the BBB knew about his past.

Palazzolo blames the problems we found on individual employees.

But he did the same thing back in Michigan. Authorities there, however, say they found the problems were part of a "corporate-wide policy aimed at ripping off consumers."

And now, some believe what we uncovered shows the same thing is happening again.

Former manager Jack Hays says, "It's a black eye to everybody in car repair."

Palazzolo claims that the two former managers, Hays and David Brockus, who we interviewed on camera are simply disgruntled employees.

But we heard these same kinds of stories from many other former employees. And, after seeing our investigation, other former employees are now coming forward and echoing those same complaints.