Posts in Legal Issues

Canadian Competition Bureau Takes Action Against Avis Budget

March 13th, 2015 Posted by General Car Rental Industry, Legal Issues No Comment yet

This is a post from the Canadian Competition Bureau’s web site:

The Competition Bureau has taken action against what it considers to be deceptive marketing practices by two of Canada’s largest rental car companies, Aviscar and Budgetcar, and their parent company, Avis Budget Group Inc.

The Bureau has filed an application with the Competition Tribunal seeking an end to alleged false or misleading price representations by Avis and Budget, a total of $30 million in administrative monetary penalties from the three companies, and refunds for consumers.

The Bureau’s investigation found that Avis and Budget advertise prices for vehicle rentals and other associated products that are not attainable due to additional fees imposed during the rental process. Furthermore, these fees are characterized as taxes, surcharges and fees that governments and agencies require Avis and Budget to collect from consumers. In fact, Avis and Budget impose these charges to recoup part of their own cost of doing business. As a result, consumers end up paying higher prices or receiving lower discounts than advertised.

Today’s action also marks the Bureau’s first proceedings under the new provisions of the Competition Act that came into force as part of Canada’s Anti-Spam Legislation (CASL) in July 2014, because Avis and Budget also use electronic messages to disseminate the alleged false or misleading representations.

Quick Facts

  • The additional fees imposed by Avis and Budget can increase the cost of a rental by up to approximately 35 per cent, depending on the rental location and type of vehicle.
  • Avis and Budget have collected more than $35 million in fees and surcharges from consumers since March 12, 2009.

Quote

“Consumers are entitled to clear and precise information when making their purchasing decisions and need to be confident that the information they receive regarding additional fees is truthful and accurate.”

John Pecman, Commissioner of Competition

Negligent Entrustment

February 20th, 2015 Posted by General Car Rental Industry, Legal Issues No Comment yet

I am considered an expert in car rental related matters and often act as an expert witness in legal cases involving the car rental industry. Accidents involving rental cars are common, but since the passage of the Graves Amendment, the rental company is usually not liable for the actions of its customers. The most common exceptions are product liability and negligent entrustment. Click here for a good explanation of the Graves Amendment. Negligent entrustment occurs when a vehicle is entrusted to an individual that should not have been allowed to have the vehicle.

How do you, as a vehicle rental owner or operator, eliminate or reduce exposure to negligent entrustment lawsuits? By being careful to do two things.

First, have well documented procedures for qualifying renters. The possession of a facially valid driver’s license is obviously one requirement, but no rental company could survive very long if that were all they required of someone trying to rent a vehicle. Possession of a major credit card in the renter’s name that can be authorized for the amount of the rental is a common requirement and many rental companies will only rent to those that have one. Other companies will rent to those with a debit card or even do “cash rentals” to those without even a debit card, but to survive they must have further qualification procedures, such as verification of employment by providing pay stubs, verification of residence by providing utility bills, etc. Whatever the procedures are, they must be reasonable, not discriminatory and designed to avoid entrusting your vehicle to irresponsible, unsafe drivers.

Second, and just as important if not more so, these procedures must be followed every time. All negligent entrustment cases that I have been involved have been situations where a company’s procedures were not followed and the vehicle ended up in the hands of an obviously unqualified driver who caused a terrible accident, resulting in serious injuries and often death.

In summary, have well documented, reasonable qualification procedures, train your staff well and do not tolerate any deviations from your procedures.

If you would like to discuss this topic in more detail, please feel free to contact me.

Jim Tennant
707-287-1311
jim@tennantgroup.com