InfoBytes Blog
California settles with rental car companies over artificially inflated vehicle repair charges
On April 15, the California Attorney General announced a $4.6 million settlement with a rental car company and affiliate resolving a joint investigation with the district attorneys into the company’s violation of state consumer protection laws. According to the AG, the companies, among other things, overcharged customers for rental vehicle repairs and failed to disclose material damage to the rental cars at the time of sale or disposal. Under state law, rental car companies are prohibited from charging customers more than the actual cost of repair, which includes any discounts the company receives according to the complaint. However, the companies frequently billed customers charges that were higher than the actual cost of the repair through the use of third-party repair estimates. Under the terms of the stipulated judgment, which also include comprehensive injunctive terms to prevent future misconduct, the companies—which did not admit liability—have agreed to comply with California laws and are required to pay (i) $1 million in restitution to affected customers; (ii) $3.3 million in civil penalties; and (iii) $300,000 in investigative costs.