Europcar repair charges scandal could cost hire company £40m

EUROPCAR has told its suppliers to stop inflating invoices for repairs and cease paying it secret rebates, after the The Daily Telegraph revealed claims that it systematically overcharged more than half a million customers for repairs over many years.

The car hire company also admitted that it expected the repair charges scandal to cost at least £40million in compensation, £10million greater than it initially claimed.

Europcar has written to suppliers ordering them to charge the company for the true cost of the work, meaning it can no longer profit from undisclosed cash payments at the expense of customers. The decision follows warnings by legal experts that such charges could be in breach of the Fraud Act 2006, as well as the Consumer Rights Act 2015.

The charges for windscreens and other repairs, which were inflated by up to 300 per cent, are being considered for investigation by the Serious Fraud Office.

Meanwhile it has also emerged that thousands of disabled drivers could be affected by the scandal as one of Europcar’s biggest contracts, worth around £25million a year, is with Motability, the charity for disabled drivers.

When vehicles leased via Motability break down, the charity provides temporary Europcar vehicles in their place, which are paid for via a corporate insurance policy.

On Monday an investigation by The Daily Telegraph revealed widespread use of similar secret deals being used by insurers to inflate repair bills. Insurers admitted the practice was “shameful”, but insisted it was not illegal.

A Europcar spokesman said: “The company is undertaking a thorough investigation and Europcar UK is fully cooperating with the authorities. Given the ongoing investigation Europcar cannot provide any more substantive comment at this stage.”

A Motability spokesman said: “Having reviewed the specific arrangements in place between Motability and Europcar for the provision of temporary replacement cars to Motability Scheme customers, the charges made by Europcar have been in accordance with our agreement.

“We are therefore satisfied that no Motability customer has been overcharged. As always, we will continue to review our arrangements with Europcar to ensure that they are providing a quality service to our customers at the agreed levels of cost.”