A west Auckland garage suspended from issuing warrants of fitness was warned over car repairs it charged for but never completed.
Westland Automotive and Tyre was suspended last Friday only after five visits by compliance officers who kept telling it to improve and fix broken testing equipment.
NZTA is under fire for letting vehicle testers break safety rules repeatedly over long periods of time.
NZTA said in a warning notice to Westland Automotive in April that the garage had correctly failed a Nissan car for having split front suspension bushes on 16 April.
"However, the customer waited three hours and paid for repairs that were never undertaken," the warning to Westland's owner Akram Zakeri said.
"You then passed the WOF."
Mr Zakeri was told to take "immediate remedial action" to make sure this never happened again, to complete an "improvement record" describing what action he had taken, and to file that record.
Subsequently, Westland kept operating through another three NZTA checks between June and October.
On Friday, NZTA said Mr Zakeri's "poor quality" binspections included failing to check rakes, seatbelts, steering and exhaust systems.
Mr Zakeri refused to talk to RNZ beyond saying he had "done nothing wrong".
NZTA is contacting owners of more than 3700 vehicles given warrants by Westland to advise them about getting their vehicles re-checked. NZTA would pay for those.
This follows similar action over almost 2000 warrants issued by the now-suspended garage, Dargaville Diesel Specialists, which NZTA said had a long record of poor inspections.
NZTA's operating procedure was to do up to four follow-up checks on a garage if the first visit showed problems.
NZTA is promising to take a stricter line.
Lawyers brought in by the government are looking into about 850 problem cases.
However, the NZTA chair Michael Stiassny told RNZ last night the failures were "far worse" than they had thought a few months ago.
Earlier he had said the agency's regulatory arm was in "intensive care".
Yesterday, Transport Minister Phil Twyford said there had been "a systemic failure across one of our most important government agencies".