So, other than a complaint at the BBB and letter to USAA asking for them to review this shops "preferred" status, what else can I do?
Oh, the possibilities are endless.
1) Let all your friends know about this place.
2) Is you a member of a local BMW club? I'm sure the people there will appreciate the heads-up.
3) Most states have a consumer complaint offcie (don't expect any results from this, but it may feel good).
4) Angie's List--are you a member? It's not a bad way to locate competent service providers of various kinds, it may be worth the annual fee (about $20 IIRC). And, then you can write reviews of service you've received at various places You can effectively reach thousands of people who are looking for a place to get their car fixed.
5) Your letter to USAA is a good idea.
6) Do any of your local TV stations or newspapers have a reporter that does consumer-oriented human interst stories? Advise them of this situation. A guy who got a bad car repair isn't much of a story, but they might bite if you tell them about the "battery service that can cost you $4500! Learn the shocking (tee-hee) story of one local driver and how you can avoid the same bill tonight at 11."
7) Give the management of the place a nice letter to begin with (not a phone call, but a letter--a registered/certified/return receipt one if you want to have proof of the communication later). I'd start off nicely, explain the situation, then tell him that you're sure he wants to do the right thing, etc. A week later (assuming no favorable respons to letter #1) let him know that you are disappointed, but understand that sometimes businesses don't honor their commitments. You want to do your part to enhance your community by advising others that do not perform in an ethical manner. "I'm sure you'll agree that this can only help to enhance the overall quality of the businesses in our town." Toward this end, you intend to take all the actions above (plus any others you can think of). They get lots of these letters, but few people follow through. Every time you send off another letter, be sure to CC him/her.
Careful out there--don't make any unsubstantiated allegations. But have fun.