Who will stand up to the car hire sharks?
Holidaymakers are being fleeced but from the regulators there’s only shameful silence...
TODAY Money Mail calls for a major crackdown on the car hire sharks that rip off British holidaymakers.
We have been bombarded with thousands of messages and responses after our investigations revealed the dirty tricks these firms use to rip off tourists in Europe.
Readers have described how they feel utterly helpless when they’re flogged expensive add-ons at collection desks — and powerless to recover damage charges that are unfairly deducted from their credit cards.
Worse, they are paying for repairs the car hire firms never actually make.
It’s adding hundreds of pounds a year to the bills of holidaymakers who have practically no way of fighting back.
Now it’s time that consumer watchdogs showed their teeth and stood up to the car rental bullies.
Our investigations exposed how the car hire firms are getting away with brazen rip-offs because the authorities have been prepared to wash their hands of the issue and let these giant businesses operate in a ‘Wild West’.
However, today we can reveal that in fact three of Britain’s biggest regulators — the Competition and Markets Authority (CMA), Trading Standards and the Financial Conduct Authority — are refusing to take responsibility for the scandal even though they could do more to crack down on rip-offs abroad.
The deals sold to British tourists are often bought online in the UK before they head off.
For a start, that means the firms can be sued in the courts here for malpractice carried out abroad, lawyers say.
The silence from these three regulators has so far been shameful.
If a British bank or building society were using scare tactics to flog unnecessary insurance policies, or were caught telling customers that the policies they’d already bought were worthless, the City watchdog would launch a far-reaching probe.
Yet the sale of car hire insurance policies, which has echoes of the PPI scandal, does not even register on the regulator’s radar. BECAUSE
the car hire companies are also offering their insurance contracts on UK websites to UK citizens, the City watchdog should be able to crack down on firms that engage in these dodgy sales practices. Money Mail understands the FCA is using a government exemption to claim it cannot regulate unless an insurance policy has been sold by a UK-based firm.
Rental companies are also engaged in anti- competitive practices by refusing to accept policies offered by rivals which cover the extra charges customers would have to pay in the event of an accident. In the worst cases, they have even lied about what these policies cover.
City regulators should also take an interest because many customers are being forced to use their UK credit cards to purchase their car hire and insurance policies.
Lawyers say the Government could also take action to make a single body responsible for the entire industry. Money Mail believes Britain’s regulators have a duty to look after customers who buy goods and services here — even if they then use the services abroad.
Crucially, our watchdogs have the power to contact their counterparts in Italy, Spain, France and the EU headquarters in Brussels and launch a joint bid to end the scandal. We know this because they have done it before.
Andrew Leakey, partner at Stephensons Solicitors and expert in consumer law, says: ‘Thousands of holidaymakers are having problems with car hire firms every year and there doesn’t appear to be a regulator with overall responsibility for this industry. The UK Government needs to act to protect people in these situations who often feel that they have nowhere to turn.’
Readers have told how family members had been stung for huge fees by car hire firms who preyed on holidaymakers. This is the oldest ruse in the book. The car hire firms know that when someone arrives from a flight they are hot, bothered, have had to queue through passport control and to get their luggage.
Their children are ratty and hungry, and everyone is dreaming of sitting by the pool. So the firms bombard customers with complicated fees and charges, knowing that once they are out the door they’ll be in the holiday mood and forget all about it. Then when they return the vehicle they bank on the customer being in such a rush that they’ll barely pay a moment’s attention to what it looks like.
Finally, any charges made will be docked from their credit card weeks later. Getting in touch with the car hire firm then proves impossibly complicated. One reader told Money Mail their niece had been billed for damage to a car she could not have caused.
She says: ‘When I looked at the picture the firm sent, it showed it had been taken six months earlier. I wonder how many folks got conned like this.’ Another, who hired a car in Ibiza, told how they were driven to a hot car park outside the airport and made to queue in the baking sun. ‘When we got to the front of the queue they said the car we had booked was no longer available and we’d have to pay for a bigger, more expensive one,’ the reader says. ‘They blocked our card for £800 and told us we had to take out their insurance and pay a fuel surcharge. There needs to be laws to regulate these sharks.’ Another reader said a car hire firm had refused to accept alternative car hire cover — forcing him to make extra payments.
The Competition and Markets Authority last investigated car hire practices in July 2015, leading a European- wide project intended to improve standards at the biggest five operators in the EU.
However, its recommendations of ‘improved transparency’ about the cost of extra insurance policies and inspections and better notification when a customer is going to get charged for damages appears to have had little effect.
All customers want is for the charges to be fair and spelled out clearly before they book. But car hire firms are going to every length to hide the true costs of the final bill from customers.
Most of the major international firms are signed up to a code of conduct from Lease-Europe, an umbrella body representing the European federation of vehicle leasing and rental company associations.
It says hire companies must ensure ‘all its advertising and literature contain no misleading or inaccurate statements, that its tariffs are promoted transparently and that its terms and conditions are readily accessible, clear and unambiguous.’
It’s time for the regulators to spring in to action and enforce these rules, set new ones — and clean up this rotten industry so that the annual holiday car hire rip-off is ended for good.
A CMA spokeswoman says: ‘We continue to examine the practices of car hire brokers to improve price transparency in that sector. We take consumer protection issues seriously and consider any evidence of wrong-doing.’
In a significant development late last night, a spokesman for National Trading Standards told Money Mail: ‘ These sort of ripoffs are deliberately designed to leave consumers out of pocket.
‘National Trading Standards can enforce breaches of consumer legislation, but sometimes what is needed is concerted action to look at the way in which a particular market operates and this would usually be led by the CMA. We will be talking to the CMA and the Government about this.’ d.hyde@dailymail.co.uk