Europcar in new rental scandal over unlicensed long-term hires

ONE of Europe’s biggest hire car firms, Europcar, is accused of operating illegally in the UK for two years in a fresh scandal which could prompt a flood of compensation claims from customers.

The firm is accused of selling long- term rental agreements, which require Financial Conduct Authority regulation, during a period where it had stopped paying to hold a licence.

This is a criminal offence under the Financial Services Act, punishable by unlimited fines. If a company is found to have deliberately operated without a licence, directors can also be prosecuted and banned.

In July 2015 Europcar relinquished its regulated consumer hire agreement with the FCA which allowed it to offer rental contracts exceeding 89 days.

The car giant did not renew the licence until June this year, three days after this newspaper first revealed it was being investigated by Trading Standards over a potential £40million consumer fraud. Europcar staff and management at rentalcars.com, a car hire broker, allege that Europcar continued to accept business from customers renting vehicles for longer than 89 days during this time. Europcar did not deny the allegations and said it was cooperating fully with the FCA.

James Daley, director at consumer campaign group Fairer Finance, said: “You don’t expect a large, well-known high street brand like Europcar to be flouting the law… it speaks of the kind of company culture which breeds a cavalier regard for the law.” Legal experts said the contracts would be legally unenforceable, meaning if customers complain to Europcar they could be entitled to some or all of their money back.

In light of the allegations the Serious Fraud Office (SFO) is preparing to begin a criminal inquiry. If Europcar is found guilty of fraud it could face a fine of up to 10 per cent of its annual turnover.

A Europcar spokesman said: “As part of the normal course of its business, Europcar UK works with all authorities including the FCA in a fully cooperative and transparent manner.”

A spokesman at Rentalcars.com said: “Europcar made us aware of this issue on July 5 2017. As a result, we ceased taking any bookings for Europcar over 84 days in length.

“We also contacted any customers, with a booking over 84 days, either live or in the future. These customers were offered the option to cancel the rental or split it into multiple rentals of less than 84 days each.”