Car rental company facing £30m payout over repairs ‘rip-off ’
EUROPCAR may have to pay up to £30million in compensation to drivers it is accused of ripping off.
The car rental firm has allegedly been overcharging for repairs to hire vehicles.
Trading Standards is already investigating, and the company faces a possible criminal probe by the Serious Fraud Office.
Now the firm has admitted the allegations could cost it ‘in the region of £30million’. The bulk of the cash would be expected to go towards compensation, however it could also cover other costs such as legal fees.
The revelation comes after the Daily Mail revealed how rental companies are charging British tourists as much as £2,200 if they damage hire cars abroad.
The investigation into Europcar is currently focused on its UK arm, based in Leicester, and is being led by the local branch of Trading Standards. A spokes- man for Leicester City Council, which runs the service, last night declined to comment.
However at the centre of the probe are claims the company overcharged customers by as much as 300 per cent for repairs over the course of a decade.
This is typically said to be through bills given to customers after they returned a hire car. Up to 500,000 people may have been affected.
Repair prices were inflated via secret, pre- agreed deals between Europcar and its suppliers, a report by the Daily Telegraph suggested last month.
This would see Europcar agree the price, plus a margin for itself, before invoicing customers for the total ‘cost’ of the work. In one case, a customer claimed that they were billed three times more than the actual cost of a windscreen repair. Almost £38million was wiped off Europcar’s value after the allegations emerged.
The Serious Fraud Office is understood to be aware of the claims against the company but said it could not disclose whether it was investigating.
The Europcar scandal also threatens to engulf the wider car hire industry, with the
Saturday’s Daily Mail National Body Repair Association reporting that overcharging is a growing concern. Jason Moseley, the organisation’s director, said big firms were using their clout to pressure small traders into ‘opaque’ practices.
He added: ‘We will be demanding an investigation with the objective to bring fairness.’
Consumer champion Which? also warned of ‘ outrage’ if the allegations against Europcar prove true. Alex Neill, the group’s director of services, said: ‘There should be an investigation to ensure others aren’t doing this and customers who have been left out of pocket are compensated without delay.’
Europcar operates in 140 countries. It has not said whether its offices abroad follow the same rules as in the UK.
Legal experts have warned that its UK repairs policy could be in breach of the Fraud Act and the Consumer Rights Act.
Europcar said yesterday: ‘The company is undertaking a thorough investigation and cooperating with the authorities. Given the ongoing investigation, Europcar cannot provide any more substantive comment.
‘However, on the basis of its own preliminary review, Europcar’s view is that the implications of the investigation will be in the region of £30million.’