Hertz settles for $168M deal in false claims of auto theft

The rental car company Hertz Global Holdings Inc. announced Monday that it would pay about $168 million to settle disputes with hundreds of customers who claim they were falsely accused of vehicle theft.

The company, which filed for bankruptcy in 2020, occasionally recorded certain vehicles as stolen, even after customers had extended and paid for their rental periods, sometimes leading to frightening run-ins with the authorities, and even jail time, according to lawsuits filed on behalf of customers across the country.

Though Hertz initially contested these claims, the company, which in February hired a new CEO, has since acknowledged some wrongdoing. In a statement Monday, Hertz said that the payout would resolve 364 pending claims relating to vehicle theft, bringing the vast majority of such claims to a conclusion.

“My intention is to lead a company that puts the customer first,” Hertz CEO Stephen Scherr said in a statement. “In resolving these claims, we are holding ourselves to that objective,” he said, adding that while the company would “not always be perfect,” it would continue working to provide leading service to the millions of customers it serves each year.

The allegations, reported last year by CBS News, and detailed in court documents, include ones from customers who say they were arrested at gunpoint; thrown in jail; or prosecuted after the company claimed they had stolen one of its vehicles. In February, after a U.S. Bankruptcy Court judge in Delaware ruled that Hertz must make public the number of people it filed complaints against, the company revealed it was filing thousands of police reports each year.

Hertz Global Holdings, Inc. also operates Dollar Rent A Car, Inc., and Thrifty Rent-a-car System, LLC. Those companies are also listed as defendants in court documents.

According to a lawsuit filed in August in Superior Court in Delaware, the false reports of theft most often fell into two categories: ones in which Hertz claimed a car was overdue, and those in which the company misplaced a car. According to the lawsuit, the latter type of case happened when the company sometimes classified cars as stolen that had in fact been rented out to customers, or were sitting on its lots.

“In all cases, Hertz’s goal is to protect its profits and cut its costs, even if it knows their own customers will lose their liberty and freedom as a result,” the lawsuit said, adding that the unsuspecting drivers were “prosecuted as if they truly committed Grand Theft Auto.”

According to another lawsuit filed in the same court in 2020, a woman was arrested in April 2019 in Broward County, Fla., after extending and paying for her Hertz rental car. She spent 37 days in jail, where she was separated from her fiancé and two children, missed her nursing school graduation and discovered she was pregnant, according to the suit.

On Monday, Hertz said it believed that the $168 million would be paid by the end of this year.