Europcar in fraud investigation
ONE of Europe’s biggest hire-car firms is accused of fraudulently overcharging customers for repairs as Trading Standards raided its UK head office yesterday.
Evidence obtained by The Daily Telegraph suggests Europcar’s UK arm may have generated millions of pounds in profit by inflating the cost to consumers of windscreens and other repairs by up to 300 per cent.
Trading Standards is investigating the firm over billing concerns including overcharging for repairs, it can be revealed.
Legal experts described Europcar’s actions as “serious” and warned that its repairs policy could be in breach of the Fraud Act 2006. Consumer groups accused Europcar of “exploiting” customers.
A spokesman for Europcar said: “Europcar takes the allegations very seriously and is conducting a thorough investigation.”
ONE OF Europe’s biggest hire car firms, Europcar, is accused of fraudulently overcharging customers for repairs as Trading Standards raided its UK head office yesterday.
Evidence obtained by The Daily Telegraph suggests the firm’s UK arm may have profited to the tune of millions of pounds by inflating the cost to consumers of windscreens and other repairs by up to 300 per cent. Trading Standards is investigating the firm over a range of billing concerns, including overcharging for repairs, it can also be revealed.
Last night legal experts described Europcar’s actions as “serious” and warned its repairs policy could be in breach of Section 2 of the Fraud Act 2006, as well as the Consumer Rights Act 2015.
If found guilty of fraud by misrepresentation Europcar could face a fine of up to 10pc of its turnover, and if found to have systemically overcharged customers it could potentially be hit with a class action over consumer law breaches.
Europcar has a market value of €1.85 billion (£1.63 billion) in France where it is listed on the stock exchange.
It operates in 140 countries worldwide. However, it is not clear whether its offices abroad operate the same policy.
Consumer groups accused Europcar of “exploiting” customers and said they suspected the practice was widespread.
If involved in an accident or scrape which falls outside their insurance cover Europcar customers are billed for an amount which is presented as the true cost of the repair, plus an administration fee.
But evidence has emerged showing the repair prices are grossly inflated via secret pre-agreed deals between Europcar and suppliers, which directly financially benefit Europcar at the expense of the customer.
Europcar agrees a net price and a margin which it gets to keep, and customers are invoiced for the total “cost” of the work, including the pre-agreed margin. Once the customer bill is paid the supplier issues Europcar with a second invoice for the pre-agreed amount, which is the true cost of the work. It then issues a rebate for the difference between the first and second invoice, which Europcar keeps.
Trading Standards in Leicester confirmed its investigation was ongoing and could make no further comment at this time.
James Daley, director at the campaign group Fairer Finance, said: “People have long suspected they are being ripped off for hire car repairs but its shocking to see the evidence. Car hire companies are in the business of loaning vehicles, not exploiting customers involved in a scrape. Europcar are unlikely to be the only ones doing this and the industry must change its ways.”
A spokesman for Europcar said: “Europcar takes the allegations very seriously and is conducting a thorough investigation. It can make no further comment at this point.” National Windscreens declined to comment.