Car rental companies to pay $4.6M in settlement

Firms accused of overcharging customers for vehicle repairs

OAKLAND >> Two car rental companies will pay $4.6 million to settle a lawsuit accusing them of cheating customers by overcharging them for vehicle repairs.

Rental car companies E-Z Rent-A-Car and Advantage OpCo, which merged in 2015, were accused of violating consumer protection laws relating to car repairs.

When a customer damages a rental car, state law prohibits the rental car company from charging the customer more than the actual cost of repair, including any discounts the company receives. The complaint filed in Alameda County Superior Court earlier this month alleged that the companies frequently did just that — bill car rental customers higher than the actual cost of repair, by using a thirdparty repair estimate.

The Alameda and San Mateo County District Attorney’s offices, along with the California Attorney General, announced the settlement agreement Tuesday.

“California law protects consumers from being overcharged for rental car damage by requiring rental companies to pass along discounts on damage repair to the renter,” said San Mateo County District Attorney Steve Wagstaffe in a statement.

Alameda County District Attorney Nancy O’Malley said her office is committed to seeing that all of California’s consumer protection laws are enforced.

“We all know how frustrating it is to accidentally damage a rental car. If you happen to do so, you should not be charged an excessive amount to repair the car or need to worry about whether the cost of repair work is being used to generate revenue,” O’Malley said in a statement. “My office is dedicated to protecting consumers from practices of this kind.”

The complaint also alleged

that the practice began with E-Z, but continued after the merger with Advantage in 2015. After being contacted by prosecutors, the companies stopped the

overbilling, according to the district attorneys’ offices.

As part of the judgment, EZ and Advantage agreed to pay $1 million in restitution; about half will be directly refunded to customers. The other half will be distributed by the government. The companies did not admit liability, but agreed to pay another $3.3 million in civil penalties and $300,000 toward the cost of the investigation.

The companies cooperated with investigators, according to a release.