Some say they spent time in jail because of Hertz's cost-cutting measures.
More than 180 Hertz customers are suing the car rental company in bankruptcy court, seeking damages of just under $529.7 million. Most of these customers were stopped by police, and sometimes arrested, for driving Hertz cars that they had legally rented.
According to their filings, for years Hertz has falsely reported that its cars were stolen as part of its regular business practice, "ensnaring its customers in accusations of car theft, throwing them in jail on felony charges, prosecuting them, burdening them with criminal records that impact their livelihoods, and separating them from their family and loved ones."
Why would Hertz claim that its cars were stolen when legitimate renters were driving them? Believe it or not, the filing claims this is a cost-cutting measure. In some cases, the company simply misplaces a car or a rental contract and doesn't know where the car is. Rather than upgrade its malfunctioning inventory systems or conduct its own investigation when cars are unaccounted for, Hertz simply reports these cars as stolen, the filing claims. The plaintiffs say the company is "effectively using the police, criminal justice system, and taxpayers to subsidize inventory control for a private corporation." The unfortunate renters who happen to be driving those cars are collateral damage.
In other cases, renters extend their contracts, but the temporary hold Hertz places on their credit or debit cards fails to go through. This usually happens because they either don't have enough money in their checking accounts or don't have enough available credit on their credit cards at the time the hold is placed. In many cases, customers will still pay for the rental, either because funds will be available by the time the car is returned and their card is actually charged, or because they use a different payment source. When a hold fails to go through, the suit alleges, Hertz routinely puts the due date back to before the extension was granted, making the car badly overdue.
Incredibly, the filing alleges and customers reported to CBS News, Hertz representatives have told customers that the charge went through and the rental extension was authorized--but then the company filed a theft report anyway. John Ayoub, a particularly unfortunate renter, has a recording of a Hertz employee extending the rental for him, saying "Yup, you're all set." Not long afterward, he was arrested and spent four months in jail for supposedly stealing the car. Meanwhile, his card was charged. In these cases, too, plaintiffs argue, Hertz is saving itself both money and work by handing off the problem to law enforcement rather than dealing with it directly.
