Why are Hertz customers arrested – or even jailed – for driving “stolen” cars?

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Some 165 Hertz Car Rental customers have filed complaints in bankruptcy court claiming they were arrested, detained and even spent months in jail because the car rental company filed reports of car thefts. on the vehicles they had rented and paid for. Hertz responded by questioning the veracity of some plaintiffs’ flamboyant advocacy. But with so many customers across the country reporting similar experiences over more than a decade, it seems clear that at least some of these incidents have actually happened.

Why did they arrive? Is the problem the result of actions or policies on the part of Hertz? Are they part of a misguided attempt to cut costs to the extreme detriment of some customers? Whatever the answers, Hertz is setting an example that every business leader must be careful not to follow.

Perhaps the most damning complaint comes from Hanna “John” Ayoub, who was jailed for months after renting a truck from Hertz and paying $ 2,309 to extend the rental. Another tenant said he was forced to walk backwards with his shirt up towards two policemen whose guns were pointed at him. Once they saw the rental agreement, the agents let him go and called Hertz to complain.

When asked to comment, a representative for Hertz sent this statement to Inc .:

Hertz cares deeply about our customers and we successfully provide rental vehicles to tens of millions of travelers every year. Unfortunately, in the legal issues discussed, lawyers have a habit of making baseless claims that blatantly distort the facts. The vast majority of these cases involve tenants who were several weeks or even months behind in returning vehicles and who stopped contacting us well beyond the expected due date. Situations where vehicles are reported to authorities are very rare and only occur after exhaustive attempts to reach the customer.

Certainly, Francis Malofiy, who represents some of these plaintiffs, is not your ordinary lawyer. He is best known for bringing a plagiarism lawsuit against Led Zeppelin over the iconic guitar introduction to “Stairway to Heaven” (which indeed sounds like part of Spirit’s song “Taurus”, released three years earlier). It’s no surprise, then, that Hertz is trying to deflect the issue by questioning Malofiy’s reputation. But the accusations against Hertz do not appear to be unfounded at all.

Ayoubt told CBS News he requested and paid for an extension to the rental of his truck and was told everything was in order. He has a recording of a Hertz agent telling him, “Yeah, you’re ready.” However, a few days later, he was arrested for “theft” of the truck. The four months he spent in prison left him lifeless and living with his parents, he says.

Complaints from Hertz customers that they have been falsely accused of stealing legitimately leased vehicles date back to at least 2008, and Hertz has lost previous lawsuits on this issue. In a strange case, customers say they were arrested because Hertz rented a car to them that the company did not actually own. And despite Hertz’s claim that such cases are “extremely rare,” Fritz Jekel, lawyer for a previous case, says he has seen an internal Hertz database of false arrests and false accusations. of theft by customers dating back to 2008, suggesting that these are not one-off events.

To emerge triumphant from bankruptcy.

In 2020, the pandemic cratered the car rental industry and Hertz filed for bankruptcy. It emerged triumphantly last July, thanks to current seller’s markets for both car rental and used cars. In October, he announced the purchase of 100,000 Tesla vehicles. Elon musk tweetedthat Tesla had more demands than it can meet and Hertz will have to pay top dollar for any cars it buys. Nonetheless, the announcement pushed up the share prices of both companies.

Because bankruptcy wipes out unpaid debts, Hertz argued that at least some of the lawsuits against it are now moot. But that argument failed to convince bankruptcy judge Mary Walrath, who ruled earlier this month that the lawsuits could go ahead.

Why would a car rental company publish stolen car reports on cars that people have rented legally? Malofiy told Inc. it was a cost saving measure. Plagued by outdated technology, he says, “They can’t track their inventory. So when they lose or misplace a car, they report it as stolen.” In fact, whenever cars go missing, local Hertz staff are supposed to investigate to find out their whereabouts. But it would take time and money and local operations are responsible for reducing costs. Reporting a car as stolen is faster, cheaper and easier, says Malofiy.

Whether Malofiy is right about all of this or not, it is obvious that Hertz is doing something wrong. It should be Customer Service 101 that you don’t put customers in jail for crimes they didn’t commit. Hertz was once the clear leader in car rental in the United States, but was overtaken by Enterprise years ago. Car-sharing subscription services like Zipcar and peer-to-peer rentals like Turo threaten to cut market share even further. In the short term, Hertz takes advantage of market events that drive up its revenues. Will he stay away from bankruptcy in the long run? This may depend on whether he rethinks his practices.

The opinions expressed here by the columnists of Inc.com are theirs and not those of Inc.com.

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