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CONCERNS ABOUT

Matco Tools

Matco Tools has come under the watchful eye of 19 different government agencies across state and federal levels. These investigations stem from numerous allegations of unethical and illegal business practices that have left franchisees seeking justice. Issues such as delayed credit card processing, deceptive franchise disclosures, retaliation against franchise owners, and restrictive business practices have raised significant concerns about Matco’s compliance with financial regulations and consumer protection laws.

Below is a list of agencies with current or submitted investigations against Matco Tools.

Matco Tools Investigations

California Agencies

1. California Department of Financial Protection and Innovation (DFPI)

  • What Matco Did:
    • Delayed recording of credit card transactions, harming consumers and businesses.
    • Potentially violated the Franchise Investment Law by failing to provide accurate Franchise Disclosure Documents (FDDs).
  • What DFPI Investigates:
    • Violations of California financial regulations and unfair practices, such as misrepresentation in franchise agreements and harmful transaction delays.

2. California Attorney General’s Office (Consumer Law Section)

  • What Matco Did:
    • Allegedly engaged in deceptive practices, including overcharging franchisees for initial inventory.
    • Blocked franchise transfers and retaliated against franchisees forming associations.
  • What the Attorney General Investigates:
    • Violations of the Unfair Competition Law (UCL) and the False Advertising Law.
    • Fraudulent or deceptive business practices harming franchisees and consumers.

3. California Department of Justice (DOJ) – Fraud and Consumer Protection Division

  • What Matco Did:
    • Allegedly retaliated against franchise owners for organizing associations.
    • Imposed restrictive practices preventing franchise sales.
  • What DOJ Investigates:
    • Statewide fraud and unfair business practices, including breaches of the California Franchise Investment Law and the Duty of Good Faith.

4. California Department of Consumer Affairs (DCA)

  • What Matco Did:
    • Failed to process credit card transactions promptly, leading to delays in refunds and incorrect billing for customers.
  • What DCA Investigates:
    • Consumer complaints about unfair billing practices, extended refund wait times, or discrepancies in financial transactions.

5. California Department of Business Oversight (DBO)

  • What Matco Did:
    • Delayed fund transfers in credit card transactions, potentially impacting financial disclosures and franchisee earnings.
  • What DBO Investigates:
    • Integrity of fund transfers, financial compliance, and transparency in business operations.

6. California Franchise Tax Board (FTB)

  • What Matco Did:
    • Credit card delays and unprocessed transactions may affect franchisee income reporting and tax compliance.
  • What FTB Investigates:
    • Tax reporting discrepancies and potential violations of California tax laws due to delayed transactions.

7. Local District Attorneys and City Attorneys

  • What Matco Did:
    • Allegedly engaged in deceptive practices that harmed franchisees and consumers locally.
  • What District/City Attorneys Investigate:
    • Violations of the Unfair Competition Law (UCL) at the local level, often in collaboration with the DFPI and Attorney General.

8. California State Controller’s Office (SCO) – Unclaimed Property Division

  • What Matco Did:
    • Delayed credit card refunds or failed to return unclaimed funds within required timeframes.
  • What SCO Investigates:
    • Compliance with unclaimed property laws, ensuring businesses remit unclaimed funds to the state.

Federal Agencies

1. Federal Trade Commission (FTC)

  • What Matco Did:
    • Potentially violated the FTC Franchise Rule by misrepresenting franchise opportunities in the FDD.
    • Used deceptive practices, such as hidden fees and unfair restrictions on franchise transfers.
  • What FTC Investigates:
    • Misleading franchise disclosures and unfair competition practices harming franchisees and consumers.

2. Consumer Financial Protection Bureau (CFPB)

  • What Matco Did:
    • Delayed financial transactions, leading to consumer harm, such as delayed refunds and overdraft fees.
  • What CFPB Investigates:
    • Violations of the Electronic Fund Transfer Act (EFTA) or Truth in Lending Act (TILA) related to credit card processing delays.

3. Department of Justice (DOJ)

  • What Matco Did:
    • Allegedly engaged in fraudulent practices, including overcharging franchisees and blocking franchise transfers.
  • What DOJ Investigates:
    • Large-scale fraud, antitrust violations, and other federal offenses affecting interstate commerce.

4. Internal Revenue Service (IRS)

  • What Matco Did:
    • Delayed transaction processing may lead to inaccurate income reporting by franchisees.
  • What IRS Investigates:
    • Tax compliance and any discrepancies caused by Matco’s operational practices.

5. Federal Reserve System

  • What Matco Did:
    • Allegedly caused disruptions in fund transfers related to credit card transactions.
  • What Federal Reserve Investigates:
    • Integrity and compliance of payment processing systems.

6. Securities and Exchange Commission (SEC)

  • What Matco Did:
    • Allegedly failed to disclose material risks related to these operational issues in parent company Vontier Corporation's filings.
  • What SEC Investigates:
    • Securities fraud and material misrepresentation in financial disclosures affecting shareholders.

7. United States Postal Inspection Service (USPIS)

  • What Matco Did:
    • Used mail and electronic systems to facilitate delayed or fraudulent billing practices.
  • What USPIS Investigates:
    • Fraud involving the mail or electronic financial transactions.

8. Office of the Comptroller of the Currency (OCC)

  • What Matco Did:
    • Potentially compromised fund transfers processed through national banks.
  • What OCC Investigates:
    • Bank compliance with federal fund transfer standards.

9. Small Business Administration (SBA)

  • What Matco Did:
    • Allegedly harmed franchisees through unfair practices, impacting their small business viability.
  • What SBA Investigates:
    • Violations of franchising principles and practices that harm small business owners.

10. Federal Bureau of Investigation (FBI)

  • What Matco Did:
    • Allegedly engaged in schemes to defraud franchisees and consumers, potentially involving interstate commerce.
  • What FBI Investigates:
    • Large-scale financial fraud and violations of federal statutes.

11. United States Department of Labor (DOL)

  • What Matco Did:
    • Misclassified franchisees as independent contractors while treating them as employees.
  • What DOL Investigates:
    • Violations of federal labor laws, including misclassification and unfair treatment.