Dollar changed to Hertz in San Diego (Miramar location)
On July 18 of last year, Melinda Basker of San Francisco rented an auto from Dollar Rent A Car at 2499 Pacific Highway. While talking to the Dollar agent, “I was extremely clear that I wanted no insurance coverage at all,” she recalls. She put her initials on the screen of a rental car agreement, “thinking I was acknowledging the fact that I was declining all insurance coverage.”
But she was charged $9 a day for “Loss Damage Waiver.” Loss damage waivers and collision damage waivers are optional damage coverage in renting a vehicle. Generally, people are covered for such contingencies by their own insurance policies. Basker complained to the company, which said that since she had signed on the line purportedly stating she wanted the coverage, she would not get her money back.
There are thousands of cases like Basker’s across the United States. In 1989, the California attorney general’s office slapped Dollar with a permanent injunction for overcharging consumers and misrepresenting insurance provisions. Employees got high commissions if they aggressively sold the add-on insurance, using contracts in such tiny print that they could not be read, according to the California charges.
The attorney general of Florida has an ongoing investigation of Dollar Rent A Car’s alleged trickery, including getting people to sign up for insurance they specifically state they do not want. The attorney general’s office confirmed that the investigation is ongoing but wouldn’t say more.
San Diego attorneys John Mattes and Alan Mansfield, along with Mansfield’s colleagues from the law firm Whatley Kallas, are working on two fraud suits against Dollar — one in California and one in Colorado. “Dollar has received over 17,000 direct, documented complaints from customers who rented vehicles in Colorado and Florida,” and Dollar admits that only a fraction of customers would normally lodge such complaints, says the Colorado suit.
“The scam is simple,” says the suit. “The company tricks consumers into buying insurance and other services they did not want by…signing up customers for collision damage waiver, car insurance and other added services they declined or were charged for without proper consent.” The company, Dollar Thrifty Automotive Group, now owned by Hertz Global Holdings, denies that charge.
The California and Colorado suits charge that Dollar creates incentives for employees to induce customers to sign for products they declined by paying generous bonuses for the add-ons the clerks generate. Dollar admits that its sales agents are eligible for commissions for sales of optional products but denies it encourages deception.
Mattes, a former on-air investigator for XETV Channel 6, has located more than 350 online complaints about such Dollar practices and has gathered more than 140 declarations detailing similar alleged mistreatments. The defendants provided him with about 1000 complaints about Dollar, half of which concerned insurance overcharges.
“Dollar appears to not be in the business of renting cars — it is in the business of selling add-on products. That is where it makes its profits,” says the Colorado suit. In Colorado and Florida alone, between July 2009 and October 2014, Dollar rang up more than $332 million in revenues from add-ons purchased by 2.6 million customers, says the suit. Hertz bought Dollar Thrifty Automotive Group in November 2012. In its last annual report to the Securities and Exchange Commission, in 2011, Dollar Thrifty complained that 25 states had adopted laws typically requiring that customers be warned that loss damage waivers may duplicate their own insurance coverage or be unnecessary. The company cautioned in that report, “Adoption of national or additional state legislation affecting or limiting the sale, or capping the rates, of loss damage waivers could result in the loss of this revenue for Dollar Thrifty, and their franchisees.”
The California and Colorado lawsuits contain some grim consumer stories. Dr. Allen Friedman, a plaintiff in the Colorado suit, says that when he demanded to see a copy of the document he was alleged to have signed, he “realized that his signature had been forged,” according to the suit.
Kristen Tool, a plaintiff in the California suit, picked up the rental car she had ordered at the San Francisco airport. The Dollar clerk “asked her to sign the signature pad to obtain the car and told her to check the boxes in order to decline all options,” according to the suit. When she discovered that her credit card had been charged an extra $231.80, she complained and was told that by checking the boxes, she was accepting the coverage, not declining it.
When she asked for a refund, she got the same canned letter that other victims get, indicating she had signed for the coverage, received it, and there was nothing Dollar could do.
Another person cited in the suits rented a car at Dulles airport in Virginia. “I was told that by signing the screen I was declining insurance. The screen I signed made no mention of insurance. A review of the contract revealed that my signature, which only appeared on the signature pad, was then transposed to an electronic contract that requested insurance.”
Another one who declined the add-ons watched as the service representative put a big D beside the spot for additional coverage. The customer then initialed the D. But she was charged anyway because she did not initial a box saying “Decline” in extremely small print.
I contacted Richard Broome, executive vice president, corporate affairs/communications of Hertz Global Holdings. He said, “This litigation pertains to events which are alleged to have happened well before Hertz acquired Dollar Thrifty and do not reflect in any way the rental experiences of current consumers.”
But Mattes has collected hundreds of statements from people saying they were victimized long after Hertz acquired the company in late 2012.
In late January, the Colorado judge denied the certification of a class-action case but allowed the plaintiffs to refile with victims who were allegedly defrauded and did not get a refund. Mattes says that won’t be a problem. There is a class certification hearing in California in April. “California has much stronger consumer laws,” says Mattes.
The United States Supreme Court has made it harder to certify class-action suits. It would be sad if this one doesn’t get to a full court hearing.