Hertz hurting after ACCC probe


Posted By on 3/05/16 at 11:01 AM

If you’ve ever butt heads with a car hire company over damage to a vehicle, then you’ll be very pleased with the outcome of the ACCC’s probe of Hertz’s operations.

As part of its review into the practices of the car hire industry, the ACCC investigated Hertz’s car damage assessment practices, and found them wanting for the following reasons.

  • Hertz advised certain customers that damage to a vehicle occurred during their rental period, when the damage was in fact pre-existing. Those customers were incorrectly charged for that vehicle damage.
  • Hertz told customers that the repair charges levied to them was the amount Hertz itself had to pay to have the vehicles repaired – but Hertz received significant discounts on spare parts which were not passed on to customers.

The ACCC stated that the conduct took place from around November 2013 to August 2015. The estimated total amount customers were incorrectly charged, or overcharged, is at least $395,000.

Following the probe, Hertz has admitted that its practices are not up to scratch and has given the ACCC court enforceable undertakings to:

  • Contact and refund customers who were charged for pre-existing damage, or who were overcharged for the cost of repairs as a result of Hertz’s erroneous repair charging practices;
  • Thoroughly review its damage assessment processes to ensure customers are not charged for pre-existing or fair wear and tear damage;
  • Improve its damage recording processes to reduce the risk of customers being falsely charged for pre-existing damage, or overcharging for repairs; and
  • Appoint an independent auditor to monitor its compliance with the undertaking.

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.”

Here’s a tip: before you drive a hire car off the lot, take the time to thoroughly inspect the vehicle for pre‑existing damage, check the vehicle damage report, and take photos of all panels of the vehicle. It will help minimise the risk of (or put you in a better position to deal with) argy bargy when it comes time to return the vehicle.

Naomi Stephens Paralegal

Naomi is a paralegal in the Competition Law & Regulatory Compliance team, focusing on marketing activations, advertising review and trade promotions compliance.  She joined KHQ after having spent... Read More