Hertz Found Guilty of Charging Customers for Pre-existing Damage
Thursday 7 April 2016 @ 10.14 a.m. | Legal Research | Trade & Commerce
It has been revealed that the Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Hertz Australia Pty Ltd (Hertz) following an ACCC investigation into Hertz’s vehicle damage charging processes.
Background
During the period from November 2013 to August 2015, Hertz represented to some of its customers that the vehicle that they had hired was damaged during their rental period, when in fact the damage was pre-existing. Hertz incorrectly invoiced and charged these customers for the vehicle damage.
Hertz also represented to some customers that the amount that they were charged to repair certain vehicle damage was Hertz’s actual repair cost, when in fact Hertz received repair discounts that it did not pass on to customers.
Hertz has acknowledged that its conduct was likely to have contravened ss 18 and 29(1) (m) of the Australian Consumer Law (ACL) [the ACL is contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth)] prohibitions on misleading or deceptive conduct and false or misleading representations, and has provided a court enforceable undertaking to refund affected consumers and to take other steps to address the ACCC’s concerns.
Comment from the ACCC
Commenting on this issue in a recent ACCC Media Release, ACCC Deputy Chair Dr Michael Schaper said:
“This case serves as a message to vehicle rental companies that they must have robust compliance procedures in place to ensure they do not contravene the Australian Consumer Law by incorrectly charging customers for damage they are not responsible for. Vehicle rental companies must also ensure that they are transparent and accurate in communicating with their customers about the charges they are applying for vehicle rentals and repairs.”
Voluntary Action taken by Hertz
A statement from Hertz said the company has invested significant resources to address the concerns about its "historical procedures" for vehicle damage charges. The company said:
"Steps already implemented by Hertz include proactively contacting customers who were incorrectly charged for pre-existing vehicle damage, as well as the ongoing review of records to identify any other customers who have potentially been impacted by its historical processes. Customers affected by this error will be refunded where appropriate and necessary."
Further Action by the Consumer Watchdog
This outcome is part of a wider ACCC review of the vehicle rental industry in Australia. As part of this review, the ACCC has been investigating various consumer issues, including:
- misleading vehicle rental pricing and charging; and
- unfair contract terms in standard vehicle rental agreements.
It also follows recent ACCC court action against another vehicle rental company, Europcar Australia (CLA Trading Pty Ltd), in respect of alleged unfair contract terms and misleading advertising of its “extra cover” products.
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Sources:
Hertz to refund hundreds of customers it falsely accused of damaging rental cars -
smh.com.au
Hertz undertakes to refund consumers and improve damage assessment and charging practices
– ACCC Release MR 42/16
