May 23 - KGO - A Seven On Your Side investigation into unlicensed locksmiths has caught the eye of some key California lawmakers. Now momentum is building to take action at the state level.
In February, ABC7 exposed unlicensed locksmiths who were charging up to ten times the going rate. Back then we checked all 2,300 San Francisco locksmiths listed in AT&T's yellowpages.com — and found that less than three percent had licenses.
Since then, we've learned more disturbing information and now the momentum is building to take action at the state level.
Dolores Castro, San Bruno: "I've been devastated. I've been scared. I've been very nervous."
Seventy-one-year-old Dolores Castro of San Bruno feels so vulnerable because she hired an unlicensed locksmith to replace her lock. But instead, he left her front door with a gaping hole and without a dead bolt.
We asked licensed All City Locksmith to come take a look.
Alex Kamand, All City Locksmith: "Might as well just not install a lock. Might as well leave it without a lock. He charged her money for doing basically nothing."
A1 San Bruno Locksmith charged $300 for the unfinished job.
It's stories like this that have caught the attention of Assemblywoman Fiona Ma of San Francisco. She's been following ABC7's investigation and has been meeting with a group of small business people about possible solutions.
Assemblywoman Fiona Ma, (D) San Francisco: "Next year we are going to be proposing legislation to try to set harsher penalties on people who are not licensed and who are overcharging customers."
The current penalty for operating without a license is just $1,000. That's a slap on the wrist considering an unlicensed locksmith charged $5,000 just to replace one lock. That includes $332 for sales tax.
A check with the State Board of Equalization confirmed taxes collected by U.S.A. A1 Locksmith have not been turned over to the state.in fact, the company doesn't even have a permit to collect taxes.
That locksmith has been identified as the same U.S.A. A1 Locksmith employee caught in our undercover camera sting in February.
Seven On Your Side submitted a state public records request to the State Board of Equalization and discovered that anywhere from 75 to 93 percent of San Francisco locksmiths listed on yellowpages.com don't have permits to collect taxes.
That means at least seven out of ten may be collecting taxes from consumers then pocketing the money.
Assemblywoman Fiona Ma, (D) San Francisco: "What they're doing is they're ripping off customers and putting money in their pocket and not turning over the money. This is an underground economy."
Just how much state tax money never gets turned over by unlicensed locksmiths is unknown, but the state controller estimates the lost sales tax revenue from all professions in California at $1.6 billion.
Al Anolik, Landlord: "I think they must have abandoned the place because nobody has touched the place in weeks."
Attorney and landlord Al Anolik showed us the office that used to be occupied by U.S.A. A1 Locksmith.
What we saw matched the description given to us by a former employee: phone numbers from various cities lined the wall, a bank of phones were to the right. So was a bed.
We also saw locksmith ads from phone books in Nevada and Tennessee.
Alan Steven Ritchie, Former Employee U.S.A. A1 Locksmith: "From what they were telling me, I'd have to say they probably have three hundred, at least, different phone numbers. They wanted to get to the point where they had phone lines across the nation."
Authorities suspect these unlicensed locksmiths list multiple names and numbers in the phone book to increase their chances of getting calls.
Alan Ritchie says he only answered calls for U.S.A. A1 Locksmith, but he says some of the other phones were labeled A1 San Bruno Locksmith.
That happens to be the same locksmith Dolores Castro called, the grandmother who we introduced to you earlier in this report.
When we told All City Locksmith what happened to Dolores, the licensed locksmith stepped up and fixed her door for free.
Dolores Castro, San Bruno: "Oh, god bless you all. I really appreciate this from the bottom of my heart and soul."
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