Cindy Ord/Getty Images
Over the years, the car rental company Hertz has accused hundreds of innocent customers of stealing their cars — charges that have resulted in arrests, felonies and prison terms for some customers.
The company will now pay $168 million to settle the claims, Hertz announced Monday.
In total, the settlement will cover 364 people who were falsely accused of car theft. In a statement, the company said this figure represented “more than 95%” of such claims.
“As I have said since joining Hertz earlier this year, my intention is to lead a company that puts the customer first. As we resolve these claims, we are holding ourselves to that goal,” CEO Stephen Scherr said in a statement announcing the settlement.
Hertz Global Holdings, which also includes Thrifty and Dollar car rental companies, filed for bankruptcy in 2020. Many of the claims arose as part of these proceedings.
Of the company’s 25 million rental transactions, 0.014%, or about 3,500, are reportedly stolen each year.
However, some of these reports have been proven to be false. In lawsuits and press reports, stories of false accusations revealed loopholes in Hertz’s rental records and theft policies that led to errors.
What customers say has happened to them
A Hertz customer was driving his rental car in Chicago when a tire blew out and he called Hertz to have the car towed, court records show. Months later, he was pulled over for improperly wearing a seatbelt and police said he had a warrant for his arrest; he was detained for more than 30 days, he said in the plea.
Another customer in Florida extended her Hertz lease four times — but court records show the car was reported stolen before the extension expired, despite a text message communication with a Hertz employee confirming plans to return it. She was allegedly imprisoned for 37 days, separated from her two children and did not graduate from nursing school.
A Mississippi man spent more than 6 months in jail after Hertz reported his rental car stolen; he returned it and paid in full, but the company did not inform prosecutors, he said in his lawsuit. He allegedly missed a hearing date and spent months in jail.
Several clients reported losing job opportunities in court due to criminal charges. Others said they were arrested at gunpoint.
Hertz initially fought in bankruptcy court to keep the lawsuits under seal. After a CBS News report made some of the incidents public, Hertz responded that the vehicles were reported stolen only after “exhaustive efforts to reach the customer.”
Many of the Hertz cases involved customers who had called to extend their rental agreement, but the extensions were not properly reflected in Hertz’s computer systems. Other cases involved Hertz re-renting cars that had previously been reported stolen without canceling police reports, leading to unsuspecting customers being pulled over by police. Other times, stolen vehicles are accidentally linked to the wrong customer, resulting in an arrest warrant for someone completely out of state.
“As a result of these routine and systematic mass reports, without verification or investigation, many innocent customers have been wrongfully arrested, arrested, jailed, prosecuted, and had their lives destroyed,” one of the lawsuits said.
Hertz emerged from bankruptcy last year, but the false accusations have yet to be resolved.
In April, shortly after taking over as CEO of Hertz, Scherr said that “fixing this situation” was a priority. “Unfortunately, even one customer was caught in the middle of what happened,” he told Bloomberg TV in an interview. “I am very confident that we will come to an agreement to do right by those who have been harmed and put this behind us.”
In September, a group of plaintiffs filed a new lawsuit in Delaware Supreme Court; this case is now resolved. A lawyer representing the plaintiffs did not respond to a request for comment.
In a statement, Hertz said it will pay $168 million by the end of the year.