2 Car Rental Firms Settle FTC Charges
The Federal Trade Commission announced Thursday that two of the nation’s leading car rental firms have agreed to settle allegations that they engaged in unfair and deceptive business practices.
The FTC accused Dollar Rent a Car Systems of Los Angeles and Value Rent-a-Car of Boca Raton, Fla., of failing to inform customers of surcharges for the use of airport shuttles, extra fees for drivers under the age of 25 and restrictions on where cars could be driven to comply with unlimited mileage conditions.
In addition, Dollar was accused of failing to disclose mandatory fuel charges and added fees for additional drivers.
“This information is vital to consumers shopping for rental cars,” said Lydia Parnes, deputy director of the FTC’s Bureau of Consumer Protection, in announcing the settlement. If customers don’t know all the charges until they reach the counter, she said, they can’t shop around for the best deal.
Although Parnes would not say whether other auto-rental firms engage in similar practices, she said the FTC “certainly intends to send a message to the industry” by taking action against Dollar and Value.
In signing a consent agreement with the government, Dollar, the nation’s sixth-largest car rental company, and Value, the ninth largest, did not admit to wrongdoing. However, they are subject to a civil penalty of $10,000 if they violate the settlement terms in the future.
The consent order requires both firms to disclose all charges that are either mandatory or cannot reasonably be avoided by consumers. Advertisements will have to include “clear and conspicuous” statements indicating that additional charges may apply, and reservation agents will have to inform callers of any charges that may apply.
In a prepared statement, Dollar said it “has confidence that its current practices are in compliance with all applicable laws.” A spokesman said that the consent agreement was entered into “simply to avoid protracted litigation.”
He also said that the company’s “management and business practices” have been totally restructured since it was purchased by Pentastar Transportation Group, a Chrysler subsidiary, in 1990.
A spokesman for Value said that the events in question occurred before Mitsubishi took over the company two years ago, and that it now complies with all guidelines under the FTC agreement.
In separate complaints, the FTC alleged that Dollar and Value failed to disclose extra charges and restrictions through television and print ads, telephone reservation systems and the computerized reservation systems used by travel agents.
One Dollar ad, for example, promised potential customers a rate of $29.95 per day. But after a 7% to 10% airport fee and a $5-per-day age surcharge were added, a 24-year-old driver would have ended up paying $38 per day, the FTC said.
